If your student is planning to start a nursing master's, physician assistant program, or doctor of physical therapy program in the next year or two, this week's news is a big deal. On May 19, 2026, a coalition of 25 states and the District of Columbia sued the U.S. Department of Education over the final rule that decides which graduate programs count as "professional" under the One Big Beautiful Bill Act (OBBBA). The reason matters in dollars: programs labeled "professional" can borrow up to $50,000 a year and $200,000 total in federal loans. Everyone else is capped at $20,500 a year and $100,000 total.
The Department's final rule, published in early May, kept the "professional" list short. It covers 11 fields, including law, medicine, dentistry, pharmacy, and veterinary medicine. Nursing, physician assistant studies, physical therapy, occupational therapy, accounting, and many other in-demand graduate programs were left off. The lawsuit, filed in federal court in Maryland, argues the Department's narrow definition is arbitrary and will deepen healthcare workforce shortages. It asks the court to vacate the rule before it takes effect on July 1, 2026.
If you are a family in the middle of planning, this puts you in a stressful spot. The rules might change. They might not. School starts either way. This guide walks through what we know, what is still up in the air, and the concrete steps to take now so your student is not caught off guard.
What the lawsuit is actually about
OBBBA, signed into law in 2025, set two new tiers of federal borrowing limits for graduate students starting July 1, 2026:
- Most graduate students: $20,500 per year, $100,000 lifetime
- Students in "professional" degree programs: $50,000 per year, $200,000 lifetime
The law left it to the Department of Education to define "professional." In its final regulations published in May 2026, the Department picked these 11 fields as professional: law, medicine, pharmacy, dentistry, chiropractic, optometry, osteopathic medicine, podiatry, veterinary medicine, clinical psychology, and theology.
That list excludes a long roster of clinical health programs, including registered nurse to nurse practitioner (MSN) programs, doctor of nursing practice (DNP) programs, certified registered nurse anesthetist (CRNA) programs, physician assistant studies, physical therapy (DPT), occupational therapy, speech-language pathology, audiology, and others. It also excludes accounting, public health, social work, and most of the master's programs Americans actually enroll in.
The 25 attorneys general argue that excluding these fields will make it harder for students to afford training that the country urgently needs. The American Hospital Association and several nursing groups have backed the lawsuit, warning the rule will worsen an already serious shortage of nurses, anesthetists, and other clinicians.
The court has not yet ruled. The Department's regulation is still scheduled to take effect July 1, 2026.
How the math changes if your student is in a non-professional program
The difference is large enough to reshape a family budget. Take a two-year master's program with a total cost of attendance of $80,000.
Under the old Grad PLUS system, students could borrow up to the full cost of attendance through federal loans. Under the new rule, a nursing or PA student in a two-year program could borrow at most $41,000 in unsubsidized Direct loans ($20,500 per year), leaving roughly $39,000 to cover from other sources. A student in a "professional" program at the same school could borrow up to $80,000 in federal loans, the entire bill.
That gap has to come from somewhere. The real options are:
- Private student loans, which generally require a cosigner and carry credit-based rates of roughly 5% to 17%
- Out-of-pocket family contributions
- Employer tuition benefits or hospital-system loan repayment programs
- Scholarships, fellowships, and graduate assistantships
- Choosing a less expensive program or staying in-state
None of these are easy. But knowing the size of the gap is the first step to making a plan you can actually live with.
Could the rule change before July 1?
Rankings
Compare private student loan options
Compare College Ave, Earnest, and Sallie Mae — with Sallie's rate matched to this program where available.
- Rank #1Editor's Pick
Graduate
College Ave
Best for: Students who want flexible repayment options and no origination fees
- 0.25% rate reduction with auto-pay
- Four in-school repayment options
- No application, origination, or prepayment fees
- Borrow from $1,000 up to 100% of cost of attendance
Apply NowRates
From 2.09% APR
2.09% - 15.99% fixed APR, 3.89% - 15.99% variable APR
Disclosures+
College Ave's student loan products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or BTG Pactual Bank, N.A., member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply. (1) All rates include the auto-pay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. If a payment is returned, you will lose this benefit. Variable rates may increase after consummation. (2) As certified by your school and less any other financial aid you might receive. Minimum $1,000. (3) This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 8.35% fixed Annual Percentage Rate (APR): 120 monthly payments of $179.18 while in the repayment period, for a total amount of payments of $21,501.54. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary. Information advertised valid as of 8/18/2026. Variable interest rates may increase after consummation. Approved interest rate will depend on creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of the Flat Repayment Option with the shortest available loan term.
- Rank #2
Graduate
Sallie Mae
Best for: Undergraduate and graduate students, and parents, comparing competitive fixed- and variable-rate private student loans
- Competitive variable and fixed rates
- Multiple repayment options
- Cosigner release available
- No origination fees
Apply NowRates
From 1.95% APR
1.95% - 14.99% fixed APR, 3.75% - 14.48% variable APR
Disclosures+
Graduate School Loan: Examples of typical transactions for a $10,000 Graduate School Loan with the most common fixed rate, Fixed Repayment Option, two disbursements, a 2-year in-school period, and a 6-month grace: For a borrower with the shortest loan term, it works out to 14.69% fixed APR, 27 payments of $25.00, 119 payments of $204.84 and one payment of $83.82, for a total loan cost of $25,134.78. For a borrower with the longest loan term, it works out to 14.78% fixed APR, 27 payments of $25.00, 178 payments of $178.22 and one payment of $98.65, for a total loan cost of $32,496.81. Loans that are subject to a $50 minimum principal and interest payment amount may receive a loan term that is less than 10 years. A variable APR may increase over the life of the loan. A fixed APR will not. Information advertised valid as of 08/25/2026. Rates: Advertised APRs for undergraduate students assume a $10,000 loan with a 4-year in-school period, a 6-month grace, and the longest loan term offered. Interest rates for variable rate loans may increase or decrease over the life of the loan based on changes to the 30-day Average Secured Overnight Financing Rate (SOFR) rounded up to the nearest one-eighth of one percent. Advertised variable rates are the starting range of rates and may vary outside of that range over the life of the loan. Interest is charged starting when funds are sent to the school. With the Fixed and Deferred Repayment Options, the interest rate is higher than with the Interest Repayment Option and Unpaid Interest is added to the loan's Current Principal at the end of the grace/separation period. To receive a 0.25 percentage point interest rate discount, the borrower or cosigner must enroll in auto debit through Sallie Mae. The discount applies only during active repayment for as long as the Current Amount Due or Designated Amount is successfully withdrawn from the authorized bank account each month. It may be suspended during forbearance or deferment. Cosigner Release: Only the borrower may apply for cosigner release. To do so, they must first meet the age of majority in their state and provide proof of graduation (or completion of certification program), income, and U.S. citizenship or permanent residency (if their status has changed since they applied). In the last 12 months, the borrower can't have been past due on any loans serviced by Sallie Mae for 30 or more days or enrolled in any hardship forbearances or modified repayment programs. In addition, the borrower must have paid ahead or made 12 on-time principal and interest payments on each loan requested for release. The loan can't be past due when the cosigner release application is processed. The borrower must also demonstrate the ability to assume full responsibility of the loan(s) individually and pass a credit review when the cosigner release application is processed that demonstrates a satisfactory credit history including but not limited to no: bankruptcy, foreclosure, student loan(s) in default or 90-day delinquencies in the last 24 months. Requirements are subject to change.
- Rank #3
Graduate
Earnest
Best for: Borrowers who want a zero-fee¹ lender with flexible repayment options² across undergrad, grad, and professional school programs
- 0.25% Auto Pay³ discount plus 0.25% Loyalty⁴ discount for eligible returning borrowers
- No origination fees, late fees, or prepayment penalties¹
- Borrow $1,000⁵ to $400,000 with 5, 7, 10, 12, or 15-year terms⁶
- Four repayment options², a 9-month grace period⁷, and cosigner release for eligible borrowers⁸
Check EligibilityRates
Lowest Rate 2.29%
2.29% - 16.24% fixed APR, 4.74% - 16.60% variable APR
Disclosures+
Earnest Private Student Loans are subject to credit approval. ¹Earnest does not charge fees for origination, late payments, returned check, or prepayments. Florida Stamp Tax: For Florida residents, Florida documentary stamp tax is required by law, calculated as $0.35 for each $100 (or portion thereof) of the principal loan amount, the amount of which is provided in the Final Disclosure. Lender will add the stamp tax to the principal loan amount. The full amount will be paid directly to the Florida Department of Revenue. Certificate of Registration No. 78-8016373916-1. ²Repayment terms and repayment options available vary based on loan type. ³You can take advantage of the Auto Pay interest rate reduction by setting up and maintaining active and automatic ACH withdrawal of your loan payment from a checking or savings account. The interest rate reduction for Auto Pay will be available only while your loan is enrolled in Auto Pay. Interest rate incentives for utilizing Auto Pay may not be combined with certain private student loan repayment programs that also offer an interest rate reduction. It is important to note that the 0.25% Auto Pay discount is not available when loan payments are deferred during the interim period as a result of selecting the deferred repayment option. ⁴To be eligible for the Loyalty Discount, applicants must have previously obtained an Earnest Private Student Loan and apply using the same email address associated with that loan. Only one Loyalty Discount may be applied per eligible Earnest Private Student Loan. Not all applicants may qualify. This offer cannot be combined with Earnest’s Rate Match program. Earnest may modify or discontinue this offer at any time and without notice, however, once a Loyalty Discount is earned, it will not be taken away. ⁵Residents of Hawaii must request a loan of at least $1,501. ⁶Available interest rates are subject to change. Interest rates as of 03/19/2026. Earnest’s Loan Cost Examples: 1.) These examples provide estimates based on principal and interest payments beginning immediately upon loan disbursement. Variable annual percentage rate ("APR"): A $10,000 loan with a 15-year term (180 monthly payments of $152.84) and a 16.85% interest rate without Auto Pay (16.85% APR) would result in a total estimated payment amount of $27,511.20. For a variable loan, after your starting rate is set, your rate will then vary with the market. Fixed APR: A $10,000 loan with a 15-year term (180 monthly payments of $150.30) and a 16.49% interest rate without Auto Pay (16.49% APR) would result in a total estimated payment amount of $27,054.10. 2.) These examples provide estimates based on interest-only payments while in school. Variable interest rate: A $10,000 loan with a 15-year term (180 monthly payments of $152.84) and a 16.85% interest rate without Auto Pay (16.85% APR) would result in a total estimated payment amount of $35,515.14. For a variable loan, after your starting rate is set, your rate will then vary with the market. Your actual repayment terms may vary. Other repayment options are available. The calculation assumes that the “in-school” period is 4 years (48 months) and includes our 9 month grace period, during which the monthly payment will be $140.42 for 57 months. Fixed interest rate: A $10,000 loan with a 15-year term (180 monthly payments of $150.30) and a 16.49% interest rate without Auto Pay (16.49% APR) would result in a total estimated payment amount of $34,886.94. Your actual repayment terms may vary. Other repayment options are available. The calculation assumes that the “in-school” period is 4 years (48 months) and includes our 9 month grace period, during which the monthly payment will be $137.42 for 57 months. 3.) These examples provide estimates based on fixed $25 payments while in school. Variable interest rate: A $10,000 loan with a 15-year term (180 monthly payments of $253.39) and a 16.85% interest rate without Auto Pay (14.92% APR) would result in a total estimated payment amount of $47,035.20. For a variable loan, after your starting rate is set, your rate will then vary with the market. Fixed interest rate: A $10,000 loan with a 15-year term (180 monthly payments of $246.61) and a 16.49% interest rate without Auto Pay (14.65% APR) would result in a total estimated payment amount of $45,814.80. Your actual repayment terms may vary. Other repayment options are available. The calculation assumes that the “in-school” period is 4 years (48 months) and includes our 9 month grace period, during which the monthly payment will be $25.00. 4.) These examples provide estimates based on deferred payments. Variable interest rate: A $10,000 loan with a 15-year term (180 monthly payments of $275.17) and a 16.85% interest rate without Auto Pay (14.67% APR) would result in a total estimated payment amount of $49,530.60. For a variable loan, after your starting rate is set, your rate will then vary with the market. Fixed interest rate: A $10,000 loan with a 15-year term (180 monthly payments of $268.03) and a 16.49% interest rate without Auto Pay (14.39% APR) would result in a total estimated payment amount of $48,245.40. Your actual repayment terms may vary. Other repayment options are available. It is important to note that the 0.25% Auto Pay discount is not available when the deferred repayment option has been selected and the loan is in the interim period. The calculation assumes that the “in-school” period is 4 years (48 months) and includes our 9 month grace period, during which the monthly payment will be $0. ⁷Nine-month grace period is not available for borrowers who choose our Principal and Interest Repayment plan while in school. ⁸To qualify for automatic cosigner release, the outstanding principal balance of your loan must be paid down to 50% or less of the original principal balance. The primary borrower must have made 36 months of required payments after the end of the Interim Period. The primary borrower must meet our eligibility and minimum credit requirements. Additional terms and conditions may apply. To request cosigner release, the primary borrower must have made 12 consecutive, monthly on-time principal and interest payments (or an amount equal thereto) immediately preceding the cosigner release application. The primary borrower must satisfy certain eligibility and credit criteria at the time of application. Additional terms and conditions may apply. ⁹Includes 0.50% combined Auto Pay and Loyalty discounts. Actual rate and available repayment terms will vary based on your financial profile. Fixed annual percentage rates (APR) range from 2.79% to 16.74% (2.29% - 16.24% with Auto Pay and Loyalty discounts). Variable annual percentage rates (APR) range from 5.24% to 17.1% (4.74% - 16.6% with Auto Pay and Loyalty discounts). Earnest variable interest rate student loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent plus a margin and will change on the 1st of each month. The rate will not increase more than once a month, but there is no limit on the amount that the rate could increase at one time. Our lowest rates are only available for our most credit qualified existing cosigned loan borrowers who receive the 0.25% Loyalty discount and requires selection of our shortest term offered, full principal and interest payment while in school, and enrollment in our 0.25% Auto Pay discount. Enrolling in Auto Pay is not required as a condition for approval. Interest rates are subject to change. Earnest Private Student Loans are made by FinWise Bank, Member FDIC. FinWise Bank, 756 East Winchester, Suite 100, Murray, UT 84107. Earnest student loans are serviced by Earnest Operations LLC, 300 Frank H. Ogawa Plaza, Suite 340, Oakland, CA 94612. NMLS #1204917, with support from Higher Education Loan Authority of the State of Missouri (MOHELA) (NMLS# 1442770). FinWise Bank and Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by agencies of the United States of America. © 2026 Earnest LLC. All rights reserved.
Stuck on what to ask your school?
Get the 8-page Family Money Talk Guide. Sent free.
We will not share or sell your email. Unsubscribe anytime.
It might. There are three possible outcomes for the lawsuit:
- The court issues a preliminary injunction before July 1, 2026, which would pause the rule while the case is heard. This would give nursing and PA students more time and possibly preserve higher loan access.
- The court declines to pause the rule, and it takes effect on schedule. The litigation continues, but the new limits are in force for the 2026-27 school year.
- The Department of Education revises the regulation on its own, possibly expanding the "professional" list, to head off the lawsuit. This is less likely on a short timeline, but not impossible.
Most legal observers expect a decision on a preliminary injunction sometime in June. Families cannot wait that long to plan. Aid acceptance deadlines, deposits, and loan applications come due regardless of what a federal judge decides.
The safe approach is to build a plan that assumes the new rule takes effect, and adjust upward if the court intervenes. A plan that assumes the rule will be paused leaves no fallback if it is not.
Stuck on what to ask your school?
Get the 8-page Family Money Talk Guide. Sent free.
We will not share or sell your email. Unsubscribe anytime.
What to do this week
Here is a practical checklist if your student is heading to a graduate program that is not on the Department's "professional" list.
Run the numbers with the lower cap in place
Add up tuition, fees, books, housing, food, transportation, and health insurance for each year of the program. Use the school's published cost of attendance as a starting point. Then subtract:
- Your family's planned out-of-pocket contribution
- Any scholarships, fellowships, or assistantships already offered
- The new federal loan cap of $20,500 per year for non-professional programs
Whatever remains is the gap you need to fill. Knowing the number is half the battle.
Talk to the program's financial aid office
Schools know the rule is creating a problem for their students. Many are quietly revisiting institutional aid budgets, exploring partnerships with health systems, and giving more guidance on outside funding. Ask:
- Are you offering any new institutional scholarships or grants this year because of the new federal limits?
- Do you have partnerships with hospitals, clinics, or other employers that pay tuition in exchange for work commitments?
- What is the typical award size for your school's merit or need-based aid in this program?
- If I commit but cannot find a way to fill the gap, what are my deferral options?
Aid offices may not have firm answers yet, but they will know more by mid-June. Get on their radar early.
Look hard at employer tuition benefits
If the student is currently working, particularly at a hospital, health system, school district, or large employer, find out whether tuition assistance covers graduate study. Many health systems pay between $5,000 and $25,000 per year toward an employee's graduate degree, often with no service commitment. Some pay more for nursing and clinical programs.
Even part-time employment at a teaching hospital can come with tuition benefits. The catch is usually a requirement to stay employed during the program. For more on this, see Employer Tuition Reimbursement: The Benefit Most Families Overlook.
Apply for hospital-system loan repayment programs
Even if a hospital does not pay tuition up front, many offer loan repayment after graduation for nurses, PAs, and physical therapists who sign on as employees. The Health Resources and Services Administration also runs the NURSE Corps Loan Repayment Program, which forgives up to 85% of qualifying nursing debt in exchange for service at a high-need facility.
These programs do not reduce what you have to borrow today, but they change the cost of borrowing over time. A student facing a $40,000 private loan gap who knows a hospital will repay $30,000 of it after two years of service is in a different financial situation than one who does not.
Shop private loans only after exhausting federal and grant options
If after all of the above there is still a gap, private student loans may be the next step. Compare lenders carefully. Look at the actual interest rate offered (not just the advertised range), cosigner release options, and what happens to the loan if your student is unable to finish the program.
Our guide to private vs. federal student loans walks through the differences in detail, and our graduate school borrowing guide covers the specifics for grad and professional students under the new rules.
Think about whether the timing of the degree can shift
This is the hardest question to ask, but worth asking. A student who can wait a year may benefit from clearer rules, more institutional scholarship money, or a hospital-sponsored cohort. A student already accepted, packed, and ready to start may not want to wait. There is no right answer. There is only the right answer for your family.
A note on existing grad students
If your student already started a graduate program before July 1, 2026, the OBBBA rules grandfather them for up to three years of continued borrowing under the old limits. That window matters. Pausing enrollment, transferring schools, or changing programs after July 1 can break the grandfathering and drop the student into the new caps. Talk to the financial aid office before making any change that interrupts enrollment.
We covered this in detail in The OBBBA Final Rules Are Here: What Families Need to Know Before July 1.
What CollegeLens can do for you
The point of all of this is to make a plan that fits your actual family, not the average family, and not the family the new rules assumed. Our free tool walks you through cost of attendance, expected family contribution, and the funding gap for each school your student is considering, and it updates automatically when rules change.
Create your free CollegeLens plan and run the numbers for any graduate program your student is considering. If the new $20,500 cap leaves a gap, the tool will show you the size of it and walk through options to close it.
The bigger picture
The lawsuit reflects something real. Graduate borrowing rules just changed in a way that hits certain fields much harder than others, and the country still needs the workers those programs train. Whether the courts step in or not, families considering nursing, PA, PT, and other clinical programs need a plan that works with the new caps. Schools, employers, and hospital systems all know this is happening, and many are quietly building new ways to help.
This is a hard moment if you are in the middle of planning. Paying for graduate school was already stressful. A late-breaking rule change does not make it easier. But you are not alone, and you do not have to figure it out cold. Run the numbers, talk to the financial aid office, ask about employer benefits, and make a plan you can sleep with.
We will keep updating as the lawsuit progresses and as the Department issues new guidance. If the court pauses the rule, or if the Department adds programs to the "professional" list, we will say so here.
Sravani at CollegeLens
Want this in your inbox?
The Family Money Talk Guide is the next read. Sent free.
We will not share or sell your email. Unsubscribe anytime.