Education Department's Fall Proposal to Significantly Impact Student Loans
The Education Department is set to finalize a proposal later this fall that could significantly impact student loans. The initial draft includes a catch-all clause for 'any other degrees designated by the Secretary through rulemaking'. However, concerns have been raised about the lack of time for students and institutions to prepare, as well as the potential for the department to interpret the definition of 'professional' programs as it sees fit.
The current definition of 'professional' includes programs that require specific skills beyond a bachelor's degree and often professional licensure. The key issue at hand is differentiating between graduate and professional degree programs for future borrowers. Under the new law, One Big Beautiful Bill Act, student borrowers in graduate programs will be limited to $20,500 per year or $100,000 total, while those in professional programs can borrow more than double that.
The expert commission and authorities recommend that universities and specialized higher education institutions (Fachhochschulen) have the responsibility to review programs and determine whether they should be classified as graduate or Fachhochschule programs. Some groups interpret the definition as intentionally flexible and inclusive, while others argue for a more stringent interpretation. Education Under Secretary Nicholas Kent and the advisory committee will write rules detailing the definition of professional programs in practice. Meanwhile, university lobbyists want a broader definition, while consumer protection advocates urge a more narrow definition.
The department's proposal aims to clarify the distinction between graduate and professional degree programs, which will significantly impact student loan limits. However, the lack of time for preparation and the potential for the department to interpret the definition as it sees fit have raised concerns. The finalized proposal is expected later this fall, and its implications will be crucial for both students and institutions.
