Nurses Could Be Hit Hard by Major Student Loan Changes

The Trump administration is moving forward with major changes to federal student loans.And one profession could be hit particularly hard by the reforms — nurses.The Department of Education is taking steps to transform the federal student loan system on several fronts.First, the department is working to implement changes to student loan limits and disbursements for new borrowers under the One Big, Beautiful Bill Act (OBBBA), which could leave prospective nurses with fewer options to finance their education.

In addition, the department is separately taking steps to restrict student loan forgiveness under the Public Service Loan Forgiveness (PSLF) program, which could also impact nursing and the broader medical profession.Taken together, the changes could limit the pathways to relief for nurses struggling with federal student loan debt and cut off avenues for new nurses to enter the field.Some advocates are warning of dire consequences for the healthcare profession, which has already been struggling with provider shortages, particularly in rural and underserved communities.Here’s a breakdown.

New limits on student loan borrowing leave nursing with fewer options Earlier this month, the Education Department’s Reimagining and Improving Student Education (RISE) negotiated rulemaking committee, which is tasked with implementing the provisions of the OBBBA, moved forward to enact new regulations that will limit the ability of students to take on new federal student loan debt.“As part of its implementation of new student loan borrowing limits included in [the OBBBA], ED proposed new definitions of ‘graduate student’ and ‘professional student,’” said The Institute For College Access and Success (TICAS) in a blog post summarizing the RISE committee hearings earlier this month.  “[The OBBBA] eliminates the current Graduate PLUS program, which allows students to borrow up to the full cost of attendance and, as of July 1, 2026, limits graduate student borrowing to $20,500 annually and professional student borrowing to $50,000 annually.Lifetime borrowing will be capped at $100,000 for graduate students and $200,000 for professional students.” Why the “graduate” and “professional” label matters Under the bill, there are significant differences in loan limits (both in terms of annual limits and lifetime borrowing limits) between “graduate” students and “professional” students.So, the exact definition of these terms is critical, as it will play a direct role in determining how much in federal student loans someone would be able to borrow to finance their degree.  A lower borrowing limit may make it more difficult for a student to be able to finance their education, which could force them to turn to costlier private student loans (which don’t qualify for relief programs like PSLF) or decide against enrolling in a particular degree program altogether.

“The Department proposes to narrow the definition of professional degrees by limiting eligibility to specific fields and corresponding four-digit CIP codes,” explained the Council of Graduate Schools in a summary.“The revised language clarifies which programs qualify as professional degrees and establishes that only students enrolled in those designated programs may be considered professional students.” How the new definitions leave nursing at a disadvantage The Education Department ultimately decided that nursing would be considered a “graduate” program, rather than a “professional” program.As a result, nursing programs will be subject to the comparatively lower borrowing limits for federal student loans.  Advocacy groups warned that this could make it more difficult for people to enter the nursing field.The American Nurses Association (ANA) warned that the decision would “severely restrict access to critical funding for graduate nursing education, undermining efforts to grow and sustain the nursing workforce.” “Nurses make up the largest segment of the healthcare workforce and the backbone of our nation’s health system,” said Jennifer Mensik Kennedy, president of the ANA, in a statement earlier this month.

“At a time when healthcare in our country faces a historic nurse shortage and rising demands, limiting nurses’ access to funding for graduate education threatens the very foundation of patient care.In many communities across the country, particularly in rural and underserved areas, advanced practice registered nurses ensure access to essential, high-quality care that would otherwise be unavailable.” Other healthcare fields requiring advanced degrees, including occupational and physical therapists, were also excluded from the definition of a “professional” degree program.Restrictions on student loan forgiveness could also hit nurses hard The limits on new student loan borrowing won’t impact nurses who are already repaying their federal student loans and aren’t planning on returning to school.But those individuals could be impacted by proposed new restrictions on student loan forgiveness under the PSLF program.

PSLF allows borrowers to qualify for student loan forgiveness after making the equivalent of 10 years of qualifying payments while working in eligible nonprofit or government employment.This would include nonprofit or public hospitals, community health centers and other similar facilities.  The proposed rule that could cut off entire employers Following through on President Trump’s executive order issued in March, the Department of Education is taking steps to implement new regulations that would cut off organizations from qualifying for PSLF if they engage in certain disfavored activities that the department determines have a “substantial illegal purpose.” This could include facilitating the violation of federal immigration laws, engaging in what the administration determines to be “illegal discrimination,” or providing certain healthcare services to transgender youth.  How the Education Department defends the change “The regulatory changes outlined in this rule are designed to preserve the integrity of the PSLF program by ensuring that only borrowers employed by organizations engaged in lawful public service remain eligible for forgiveness,” said the Education Department in commentary included with the publication of the regulations in the Federal Register in October.  “By excluding employers that engage in activities with a substantial illegal purpose, the rule aims to better align PSLF eligibility with the program’s statutory intent—to reward public service.Furthermore, it ensures that the Department is not indirectly subsidizing employers who are engaging in activities that have a substantial illegal purpose.” Why this could leave nurses with no recourse But the rules, if enacted, would allow the department to cut off an entire organization (such as a hospital, university system or state government) and all of its employees from PSLF eligibility.Individual student loan borrowers would have no recourse, aside from trying to find a different job with an employer that is still eligible for PSLF.

A broad group of nonprofit organizations, labor unions, municipalities, and state governments filed multiple legal challenges last month to try to block the student loan forgiveness restrictions before they go into effect, arguing that the rules are illegal and will have a chilling effect on hiring in key fields.“The proposed rule would have a chilling effect on employers’ ability to recruit and retain qualified staff working in critical fields and with rural and other marginalized communities,” said the National Council of Nonprofits in a lawsuit filed against the Education Department in October.“The chilling effects of the Rule are only exacerbated by the Rule’s vague language, the Administration’s ever-shifting views on supposed ‘illegal activities,’ and the untrammeled authority that the Rule gives the Secretary to determine when an organization should be excluded from participation in the program.” What it could mean for nursing going forward The proposed restrictions on student loan forgiveness for PSLF aren’t in effect yet and wouldn’t go live until next summer.But the challengers are arguing that the rules are already causing some student loan borrowers to rethink working in public service.

Coupled with the new borrowing limits, advocates are concerned that the changes could have very real consequences for fields like nursing, and ultimately, for the public at large.