Michigan health experts react to new student loan limits going into effect July 1

A federal judge just blocked a Trump administration move to limit the amount of federal loans nursing students can borrow, but medical students aren't off the hook yet.  

Congress passed the One Big, Beautiful Bill Act, a federal budget bill known for massive tax cuts, last year on July 4, 2025. But this past May, the Department of Education finalized the federal loan policy that will now go into place.

Under the initial policy, the bill eliminated Graduate PLUS Loans, which allowed graduate and professional students to take out the full amount they needed to cover the cost of their education in federal loans.  

The bill also created new caps for federal loans for both professional and graduate students. Professional students will now be subject to a $50,000 annual borrowing cap and a $200,000 total cap. The annual cap for graduate students is $20,500, with a total cap of $100,000.  

Part of the Department of Education's initial policy, which has now been reversed, was excluding nursing programs from the professional definitions. Designating nursing as a graduate program would mean that nursing students would be eligible for only half the amount of loans they would typically receive.  

"The U.S. Department of Education excluded nursing from being a professional degree, thus limiting the amount that they can borrow. It was $200,000, now it is $100,000," said Amy Brown, chief nursing officer with the Michigan Health and Hospital Association. "That $100,000 is going to make or break the opportunity for someone to be able to advance their degree."

U.S. District Judge Beryl Howell blocked the Trump administration's plan to define nursing as a graduate program. Now, nursing students have regained access to the $200,000 in federal loans they could previously borrow as the department has updated its policy in accordance with the ruling. The department disagrees with the decision made and plans to fight it in court.  

"Our population in Michigan is aging, so we have more people that are growing older than those who are being born into the state," Brown said. "It's going to be very difficult to sustain taking care of all those people, so we definitely need to continue to make sure that we're increasing the pipeline."

Meanwhile, medical students are still subject to new loan limits for professional students and the erasure of Grad PLUS Loans. The $200,000 annual limit may not be enough to cover the full cost of medical school attendance, according to Dr. Andrea Wendling, Michigan State University College of Human Medicine senior associate dean.  

"It doesn't cover the cost of medical students' education," Wendling said. "There's a gap between the amount of money they can borrow for that education and the cost of the education. That gap is what we're worried about."  

With the new federal loan limits, prospective medical students are turning to private loans that have reduced the qualifications for applying, allowing students who otherwise would not be able to qualify to borrow enough money.  

"We can see that private markets are starting to understand that these students are good loan risks, and they're trying to work on these loans to make better options," Wendling said.