Federal Graduate Student Loan Changes Impacting MFTs

There are upcoming changes to the federal student loan program that will impact MFTs seeking such loans starting on July 1, 2026. Federal legislation signed into law in July, known as the One Big Beautiful Bill Act (H.R. 1), makes many significant changes impacting graduate and undergraduate students who need federal student loans. The impact of these changes will be the elimination of a popular federal graduate loan option, new borrowing limits for MFTs and other graduate students, and restrictions on graduate programs deemed to have graduates earning below a certain median income. A summary of the most significant changes pertaining to graduate student loans can be found below.

Loan Limits Impacting MFTs and Other Healthcare Professionals

The new law eliminates the Federal Direct Graduate PLUS Loan for all instruction beginning on or after July 1, 2026. This loan program allows borrowers to borrow up to the full cost of attending a graduate or professional program. Effective July 1, 2026, MFT students and other graduate students will still be able to receive Federal Direct Unsubsidized Loans. However, beginning on July 1, 2026, new borrowing caps will take effect. The maximum amount a student may borrow will be determined by regulations from the Department of Education. For all students enrolled in a post-baccalaureate health professions program, the new law caps annual loans for a new borrower who is a “professional student” at $50,000 per year, but caps annual loans for a new borrower who is a “graduate student” at $20,500 per year.

In August, AAMFT signed onto a letter with many other associations urging the federal Department of Education (ED) to adopt rules that ensure MFT graduate programs and other healthcare programs are included as “professional degree” programs for purposes of the revised federal student loan program. Current federal regulations list ten examples of what is considered a “professional degree”, such as medicine and dentistry. However, the current regulations also specify that the definition of professional degree “include[s] but [is] not limited to” the ten examples listed. MFTs and other non-MD mental health professions are not specifically listed in this definition; however, they are included in the broad definition of “professional degree” in existing regulation, which states that a professional degree is “A degree that signifies both completion of the academic requirements for beginning practice in a given profession and a level of professional skill beyond that normally required for a bachelor’s degree. Professional licensure is also generally required.” It is important to be considered as a professional degree program as the new law caps loans for post-baccalaureate students in a “professional degree” program at $50,000 a year while loans for other graduate degree programs are capped at only $20,500 a year. This letter urges ED to adopt this inclusive view of this term.

In September and November, ED held two negotiated rulemaking sessions. ED proposed a rigid definition that will exclude all students attending MFT or all other healthcare graduate programs, except for the 10 professions specifically listed in the current “professional degree” rule. At the end of the second session in early November, the final negotiated rulemaking added clinical psychology alongside the 10 professions specifically listed in the current rule but made no other major changes to the rigid rule ED had proposed.

The negotiated rule defines “professional degree” as follows:

Is generally at the doctoral level, and that requires at least six academic years of postsecondary education coursework for completion, including at least two years of post-baccalaureate level coursework; and

Includes only the following professions: Pharmacy (Pharm.D.), Dentistry (D.D.S. or D.M.D.), Veterinary Medicine (D.V.M.), Chiropractic (D.C. or D.C.M.), Law (L.L.B. or J.D.), Medicine (M.D.), Optometry (O.D.), Osteopathic Medicine (D.O.), Podiatry (D.P.M., D.P., or Pod.D.), Theology (M.Div., or M.H.L.), and Clinical Psychology (Psy.D. or Ph.D.).

The proposed rule divides all post-baccalaureate students into two groups:

Professional Students: Students who are enrolled in a program of study that awards a “professional degree” are considered professional students. A “professional student” is eligible to borrow up to $50,000 per year.
Graduate Students: All other post-baccalaureate students not otherwise defined as professional students are defined under the proposed rule as graduate students. A “graduate student” is eligible to only borrow up to $20,500 per year. Since Marriage and Family Therapy is not listed as one of the 11 professions the proposed rule considers a profession offering a “professional degree,”, MFT students would be considered graduate students under this proposed rule. Many other professions, including Clinical Social Work, Mental Health Counseling, Nursing, Occupational Therapy, and Physical Therapy, would also not be defined as offering a professional degree under this proposed rule.

Should the proposed rule go into effect, MFTs and many other healthcare providers will be subject to the lower “graduate student” loan cap. AAMFT is working in coalition with many other healthcare providers who have also been left out of the narrowly defined “professional degree” category. While the negotiated rulemaking process has concluded, these definitions will not be finalized until after the public comment period. We expect that the public comment period will open no earlier than January 2026.

Earnings Test

H.R. 1 also added an earnings test. Starting on July 1, 2026, the new law will restrict federal student loan availability for graduate programs deemed to have low earnings outcomes. Under this test, a certain cohort of graduates, as defined in the new law, cannot have earnings that are less than the median earnings of a working adult who has only a bachelor’s degree and is not enrolled in any institution of higher education.

Please note that this is a brief summary of the changes to the graduate and professional student loan programs. These changes are not in effect until July 1, 2026, so MFT students will not be impacted by these changes during the 2025-2026 academic year. The Department of Education will be responsible for enforcing these restrictions, as well as developing regulations implementing the earnings test and other changes. AAMFT will monitor these upcoming regulatory changes and plans to submit comments to the Department of Education on these changes.

FAQs

1. What is the impact of this proposed rule?

AAMFT strongly opposes the exclusion of the Marriage and Family Therapy degree from the “professional degree” definition in the proposed rule. If this proposed rule goes into effect in July 2026, it will have a significant impact on the overall number of students entering the MFT profession. The lower borrowing limits will discourage potential students from enrolling in an MFT program, with the most significant impact on potential students from rural, underserved, and marginalized communities. This restriction will force many MFT students to obtain loans from private lenders, who will charge a higher interest rate for borrowers. This change will also have a disproportionate impact on women, who make up the overwhelming majority of students who would be defined as graduate students under this proposed rule. Since this proposed rule would result in fewer MFTs, this change will ultimately reduce access to MFTs and other healthcare professionals.

2. If Marriage and Family Therapy is not included in the “professional degree” definition, does this mean that MFTs will be unable to continue to be reimbursed as Medicare and Medicaid providers, recognized and reimbursed by private insurance companies and health plans, lose the ability to diagnose, or cause states to not issue licenses to MFTs?

No. The potential inclusion of MFTs in the lower borrowing limit will not impact the ability of MFTs to be reimbursed as Medicare and Medicaid providers, recognized and reimbursed by private insurance companies and health plans, impact the ability to diagnose, cause states to not issue licenses to MFTs, or impact other laws and policies not directly related to graduate student loan programs. The status of MFTs in state licensure laws and with public and private health plans is not negatively affected by any inclusion in the lower federal borrowing limit.

3. I am planning to pursue a doctoral degree in Marriage and Family Therapy. Under this proposed rule, would I be considered a “professional student” under this definition?

No. Under the proposed rule, only those students who are in one of the 11 professions defined as a “professional degree” would be eligible to be considered professional students under this proposed rule.

4. How can MFTs get involved in advocating for a more inclusive definition of “professional degree” that would include MFTs and other professionals?

Over the next few weeks, you can participate in advocating for the inclusion of MFTs in three ways:

Completing AAMFT’s brief survey to share how student loans supported your pathway to becoming an MFT.

Telling Congress to protect federal student loans for MFTs and other healthcare providers: Send this prewritten grassroots message to your Representative and Senators, urging them to take action on this important issue. Your family, friends, and colleagues can also use this link to send this message to Congress.

When the public comment period opens on this rigid proposed rule, submitting comments to ED emphasizing the need for behavioral health providers to be included in the definition of “professional degree”.

ED is expected to start accepting comments early next year, likely in January. AAMFT plans to alert members when ED starts to accept public comments concerning this harmful proposed rule.

This is a summary of the proposed changes to the graduate student loan programs impacting MFTs based upon the information available. Please feel free to contact AAMFT at familyteam@aamft.org if you have any questions.