Federal student loan limits: Where we stand and what comes next for OT
The Department of Education (ED) is moving forward with new rules that will fundamentally change how graduate students finance their education.
Under the rule ED will propose, master’s and doctoral occupational therapy programs are not classified as professional programs, but instead as graduate programs. “Graduate programs” will have a $20,500 annual limit, with a $100,000 total cap, while programs defined as “Professional programs” will have a $50,000 annual limit, and $200,000 total cap. This means that future OT students would be subject to a significantly lower loan limits.
As outlined in an earlier article, these changes stem from H.R. 1, the One Big Beautiful Bill Act, which eliminated the Grad PLUS loan program and introduced strict borrowing caps under the Direct Unsubsidized Loan program.
This change will take effect on July 1, 2026, and will apply to new borrowers. Existing borrowers will not be impacted. Many other health professions, including physical therapy (PT), speech-language pathology, advanced practice nursing, and physician associates will also be classified as graduate programs.
Background and AOTA’s Advocacy
From the outset of H.R. 1’s development, AOTA emphasized to Congress that a narrow definition of “professional programs” would exacerbate the health workforce shortage. Congressional staff informally indicated that the intent was to include licensed health professions requiring advanced degrees under the “graduate programs” definition. However, during ED’s negotiated rulemaking process, the historical list of ten professional programs (including medicine, law, and pharmacy) remained unchanged, with only clinical psychology added. We feel strongly that ED’s use of a decades old list of health professionals does not reflect modern healthcare delivery, which utilizes an interdisciplinary team of highly trained health professionals, and we are angry at the exclusion of occupational therapy from the list of graduate programs.
AOTA has taken multiple steps to address this issue:
- During legislative debate: Engaged Members of Congress to highlight the impact on health professions.
- Post-enactment: Alerted the broader health-care community and convened a coalition of more than 50 organizations to advocate for inclusion of OT.
- Rulemaking engagement: Submitted comments, and encouraged occupational therapy academic programs to submit comments, urging ED to broaden the definition.
Despite these efforts, and specific mention about the need to include OT and PT by negotiators representing Veterans, ED has indicated that the rule will likely be finalized without adding OT programs to the professional category. The only mechanism for future additions to this category would be a separate negotiated rulemaking process, which is not currently planned, and would only happen if ED decided to revisit the definitions, or Congress directed ED to do so.
Implications
The elimination of the Grad PLUS program, combined with restrictive borrowing caps, will force many students to seek private loans, often at higher interest rates and with credit requirements that create barriers to entry. This policy risks reducing access to OT education and worsening workforce shortages at a time of growing demand for occupational therapy services.
Next Steps
Congress retains the authority to address this issue and can tell ED to include a wider range of professions. AOTA will continue to lead advocacy efforts with ED, Congressional champions, and coalition partners. However, constituent engagement is critical.
Action Needed:
- Visit AOTA’s Legislative Action Center
- Contact your Members of Congress to explain the impact on students, programs, and patient care
- Share this information within your networks to amplify awareness
AOTA remains committed to protecting the OT workforce and ensuring that future practitioners have equitable access to federal student loan programs.