Background

The One Big Beautiful Bill Act, which was signed into law last July, includes several cuts to educational funding. The law caps undergraduate loans and eliminates the GRAD PLUS loan program for graduate and professional students. Instead, the law created a "new and simplified" Repayment Assistance Plan (RAP) that allows graduate students to borrow a maximum of $100,000 and professional students to borrow a maximum of $200,000.

Currently, the Department of Education categorizes the following programs as professional:

• Medicine
• Pharmacy
• Dentistry
• Optometry
• Law
• Veterinary medicine
• Osteopathic medicine
• Podiatry
• Chiropractic
• Theology
• Clinical psychology

Notably, nurse practitioners, physician assistants, physical therapists, and audiologists are excluded from the list. The loan changes, as well as overall adjustments to finances and funding for higher education, will take effect July 1, 2026.

20+ states sue over federal loan limits

On Tuesday, a coalition of 25 states and the District of Columbia sued Education Secretary Linda McMahon, arguing that she exceeded her authority and bypassed guardrails set by Congress by creating an arbitrary definition of "professional degree."

"The Department [of Education] heavily relied on 'its own historical practice' in defining 'professional degrees' … as well as whether a worker was 'supervised by another professional who has … more education, training, and qualifications,' … neither of which Congress intended it to consider," the legal complaint states.

"We have a major healthcare workforce shortage in North Carolina. We have a very clear primary care shortage in 93 of 100 counties, in particular in rural counties," which the new rules could exacerbate, said North Carolina Attorney General Jeff Jackson (D). "This is not just a workforce shortage issue, this is a respect issue. Saying that these folks earned degrees that aren't professional degrees — it's not true, it's not fair, and it's unlawful."

In response to the lawsuit, Education Undersecretary Nicholas Kent said the coalition opposed "commonsense loan caps" that incentivize colleges and universities to lower tuition costs.

"For years, Democrats parroted illegal loan forgiveness to 'end the debt crisis' and buy votes, and now the same people are fighting against the Trump Administration's legal efforts to drive down the cost of college," Kent said. "Clearly, these Democratic governors and attorneys general are more concerned about institutions' bottom line rather than American students and families' ability to access affordable postsecondary education."

Optum Advisory's* Anne Schmidt and Advisory Board's Ali Knight and Monica Westhead have also underscored a need for healthcare organizations to support their nurses amid these changes.

"Healthcare leaders should advocate for recognition, strengthen workforce planning models to fortify all professional pipelines, and expand care models that leverage NPs and PAs in partnership with physicians to meet community needs," they wrote. "Without nurses, NPs, PAs, and faculty, health systems cannot deliver safe, equitable, and timely care."

To help organizations safeguard their workforce sustainability, Schmidt, Knight, and Westhead recommended organizations focus on five priorities:

• Impact analysis: Understand how loan caps affect pipelines for nursing, PA, and allied health roles.
• Workforce planning: Build strategies for recruitment, retention, and succession to prevent shortages. Providing nurses with career growth opportunities beyond advanced degrees can also help promote retention and offer nurses new ways to develop their skills.
• Operational efficiency: Reduce cognitive strain through workflow redesign and technology integration.
• Staff well-being: Reinforce with your teams that this change in definition does not diminish their roles as nurses, physical therapists, PAs, and other healthcare professionals. Embed mental health resources and resilience programs to combat burnout and other causes of discontent within the healthcare workforce.
• Innovation: Expand telehealth, team-based care, and predictive workforce models to meet demand.

*Advisory Board is a subsidiary of Optum. All Advisory Board research, expert perspectives, and recommendations remain independent.