Federal Loan Caps and the Exclusion of Counseling and Therapy Programs from "Professional" Status by the Department of Education
Summary of the Issue
The American Mental Health Counselors Association (AMHCA) is deeply concerned by the Department of Education’s preliminary implementation guidance for the One Big Beautiful Bill Act (H.R. 1), which establishes new federal student loan caps for graduate and professional students beginning July 1, 2026 and issues the Repayment Assistance Plan (RAP) to replace existing loan repayment programs, including the Grad PLUS Program and much of the Parent PLUS program. Under these changes, counseling and therapy programs—including Clinical Mental Health Counseling, Marriage and Family Therapy, and related master’s and doctoral degrees—are (1) not included among the eleven “professional degree” programs though this degree meets a professional and licensure standard and (2) therefore will be restricted to the lower graduate-level cap of $20,500 per year for student loans rather than the $50,000 per year for professional degrees.
Why it matters
Excluding counseling programs from the professional-degree designation creates a harmful and artificial distinction between Licensed Mental Health Counselors (LMHCs) and other health-care professions such as physicians, dentists, pharmacists, and—even more concerning—clinical psychologists, who were included on the professional list. This reinforces outdated stigma suggesting that mental health providers are not true health professionals, contradicting parity laws and decades of advocacy to ensure equitable care and coverage.
This decision also threatens the behavioral-health workforce by making counseling education financially inaccessible. Program costs often range from $14,000 to $60,000 annually and do not include additional expenses such as practica, supervision, licensing exams, travel, or living costs—gaps previously filled by Grad PLUS loans that will no longer be available. With many programs exceeding the new $20,500 annual loan cap, enrollment will likely decline, disproportionately affecting first-generation students, underrepresented communities, rural students, and those pursuing clinical careers out of commitment to service. These barriers directly undermine AMHCA’s decades of work to establish LMHCs as highly trained, independently licensed mental health professionals essential to meeting the nation’s growing behavioral-health needs.
Action
Contact your Members of Congress
If you are also concerned about this,
Template (feel free to add in your own student loan story, see examples below)
As a mental health counselor and your constituent, I urge you to preserve the professional status of degrees and rate of student loans currently in review by the Department of Education (ED). Mental Health Counseling Programs are essential to the health and safety of the public and are crucial to maintaining a strong workforce and success of our nation.
Please take immediate action to ensure that Department of Education adds Counseling and Therapy degrees as officially designated professional degrees under the new Repayment Assistance Plan (RAP), allowing students in these fields to retain full access to professional-level federal loan support.
At a time when the United States is facing an increase in unmet need for mental health services, we cannot wait to take action. Substantial shortages of mental health counselors, school counselors, addiction counselors, and marriage and family therapists will only worsen under the proposed changes.
With more than one-third of the U.S. population living in a Mental Health Professional Shortage Area, any additional barriers to pursuing these degrees will be detrimental to the health of our nation. We cannot afford to lose federal support for these professions.
Read more online [Insert Link Here].
Student Loan Story Examples
a) I did not qualify for personal loans when completing my graduate degree. The Grad Pluss loan ensured that I was able to afford the cost of living while attending school. My graduate program was 90 credit hours and $120,000 for two years at a professional school. I have a master’s degree in psychology that allowed me to become a licensed clinical mental health counselor in the state of Iowa where I have lived and contributed to the workforce since 2012. I am passionate about ensuring that we have opportunities for students to pursue their degree in mental health counseling fields.
b) Federal student aid was essential for me to complete my degree. As a second career path, I did not plan for additional student training, but worked hard to focus on school, work minimally while getting a graduate degree and training. I complete my degree and post-graduate training and supervision in just over 4 years. I was able to quickly enter the workforce with an independent license and opened a private practice to be able to pay back my student loans in a timely manner. I would not have been able to focus on my degree if loans were not there to support my commitment to the field.
FAQ
The following content was initially drafted with the assistance of generative AI and has been refined through review and edits by the Public Policy & Legislative Committee and the AMHCA Board of Directors.
If you would like additional information, here are some highlights below. Or check out NASFAA | You Have Questions; We Have Answers: Making Sense of the Student Loan Changes from OBBBA’s RISE Committee
1. What is H.R. 1 / “One Big Beautiful Bill Act”?
H.R. 1 in the 119th Congress (P.L. 119-21) is the large tax-and-spending package President Trump signed on July 4, 2025, popularly called the “One Big Beautiful Bill Act” (OBBBA or “Big Beautiful Bill”). It includes a big section on federal student loans that:
- Caps unsubsidized federal loans for graduate students at $20,500/year, $100,000 lifetime
- Creates a higher cap for certain “professional degree” programs at $50,000/year, $200,000 lifetime
- Eliminates Grad PLUS loans going forward
- Significantly restructures income-driven repayment into a new Repayment Assistance Plan (RAP)
So yes: this is a real law, and it really does implement that $20,500 vs. $50,000 structure.
2. What is RAP and what does it “replace”?
The Repayment Assistance Plan (RAP) is a new income-driven repayment (IDR) plan created by the reconciliation law and implemented under the One Big Beautiful Bill Act. Key points:
- For new Direct Loans on or after July 1, 2026, borrowers will only have two repayment options:
- A new standard plan (10–25 years, fixed payments)
- The new income-driven Repayment Assistance Plan (RAP) Every CRS Report
- RAP sets payments between 1–10% of income, over 30 years, with forgiveness at the end and special interest rules. Earnest
- Existing IDR plans (SAVE, PAYE, ICR, etc.) are phased out for future borrowers; they remain available only temporarily for borrowers who already have loans before the cutoff dates. Every CRS Report
So, your sentence “RAP will replace existing loan repayment programs” is broadly right for new borrowers after 7/1/2026: older IDR choices go away and RAP becomes the main income-based option.
However:
- RAP itself does not replace Grad PLUS or Parent PLUS.
- Grad PLUS and Parent PLUS are loan types.
- RAP is a repayment plan. The bill eliminates Grad PLUS and caps Parent PLUS; RAP is what many borrowers will use to repay the remaining and future loans.
3. What happens to Grad PLUS and Parent PLUS?
Grad PLUS
Multiple analyses and school financial aid offices confirm that Grad PLUS is being eliminated for future borrowing, replaced with stricter limits on the standard Direct Unsubsidized loans:
Parent PLUS
Parent PLUS is not fully eliminated, but heavily restricted:
- New Parent PLUS loans will be capped at $20,000 per student per year, with a $65,000 lifetime limit per student. Drake University
- Parent PLUS borrowers are not eligible for RAP under the new rules; most will have very limited access to income-driven repayment going forward. NerdWallet
So, your sentence “RAP will replace existing loan repayment programs, including the Grad PLUS Program and much of the Parent PLUS program” mixes two things together:
- Accurate:
- Grad PLUS is being ended as a borrowing option for new loans.
- Parent PLUS is being capped and largely cut off from new IDR options.
- Not quite precise:
- RAP doesn’t “replace Grad PLUS”; rather, the law eliminates Grad PLUS and, separately, creates RAP as the main IDR plan for eligible borrowers.
4. The new loan caps: $20,500 vs. $50,000
The Department of Education and multiple higher-ed organizations confirm the basic structure you quoted:
- Starting July 1, 2026, for new borrowers:
- Graduate students (ordinary master’s & doctoral programs)
- Max $20,500 per year, $100,000 aggregate
- Professional students (in “professional degree” programs)
- Max $50,000 per year, $200,000 aggregate
Under the old rules, grad students could often borrow up to the full cost of attendance using a combination of unsubsidized loans + Grad PLUS. That’s what’s going away.
So, the logic of the bill is: “If your degree is ‘professional,’ you can still borrow a lot; if it’s ‘just’ graduate, you’re capped much lower.”
Which brings us to the really important part of your question…
5. How is “professional degree” being defined, and what are the 11 degrees?
There are two overlapping things happening:
- The statute relies on an existing regulatory definition of “professional degree” in 34 CFR 668.2. NASFAA,
- The Department of Education and its RISE (Reimagining and Improving Student Education) negotiated-rulemaking committee have, in practice, narrowed this to a short list of primary programs that clearly qualify for the higher cap.
According to coverage by the Association of American Universities (AAU) and national media, the Department and negotiators agreed that 11 primary programs count as professional degrees for purposes of the higher loan cap:
- Pharmacy
- Dentistry
- Veterinary Medicine
- Chiropractic
- Law
- Medicine (M.D.)
- Optometry
- Osteopathic Medicine (D.O.)
- Podiatry
- Theology
- Clinical Psychology (newly added)
News outlets and fact-checkers note that nursing, physical therapy, physician assistant, social work, and many other health/behavioral health fields are not on this list and will therefore be treated as regular graduate programs with the lower cap. AP News
6. Where do counseling and therapy degrees fall?
This is the heart of it.
- Counseling and therapy master’s and doctoral programs (e.g., M.A./M.S. in Clinical Mental Health Counseling, MFT, school counseling, etc.) are not among the 11 named professional degrees getting the higher cap.
- That means students in these programs, as currently classified, get the graduate cap, not the professional cap:
- $20,500/year, $100,000 lifetime in unsubsidized loans
- There is some ambiguity around clinical psychology:
- Clinical psychology is explicitly on the professional list in some coverage and higher-ed analyses (making it one of the 11).
- But master’s-level counseling/therapy degrees generally are not being treated as “professional” in this sense.
Some higher-ed groups (like NAICU and NASFAA) say institutions may have some room to argue that additional programs meet the regulatory definition in 34 CFR 668.2, but the Department has not yet created a clear, open process for adding new programs to the list—and advocacy groups are warning that schools that try to stretch the definition could face scrutiny. NAICU
So, your sentence: “Counseling and Therapy programs were not included on this list, meaning students in these fields would not qualify for the higher funding cap.”
As of the latest information:
- Factually accurate in practice: Counseling/therapy students are not on the DOE’s short list and do not automatically qualify for the $50,000/$200,000 cap.
- There is some open question whether a few very specific licensure-focused programs (e.g., some PsyD or specialized clinical programs) might be argued into “professional degree” status at the institutional level—but that would be case-by-case and is not guaranteed.
7. Timeline and who is affected
Key dates and who’s impacted:
- July 4, 2025 – Bill signed into law.
- July 1, 2026 –
- New loan caps kick in for new borrowers in graduate and professional programs.
- Grad PLUS is eliminated for new borrowing; Parent PLUS caps begin for new Parent PLUS loans.
- New borrowers get only Standard or RAP repayment options.
- Through June 30, 2028 – Borrowers with existing loans from before July 1, 2026 can generally stay on or move among the legacy IDR plans, then the menu shrinks.
So, roughly:
- Current counseling/therapy students who already borrowed Direct Loans before July 1, 2026:
- Keep older loan caps for a limited time and have more repayment-plan options.
- Future counseling/therapy students starting/borrowing after July 1, 2026:
- Face the $20,500 / $100,000 caps and RAP/Standard as the main repayment choices.
8. What this means for counseling & therapy students/programs
Financial impact
For many counseling/therapy programs—especially those at private universities or in high-cost metro areas—$20,500/year may not cover tuition + living costs, especially if internships/practica limit work hours. Without Grad PLUS, the typical gap-fillers would be:
- Private student loans (often higher interest, less flexible)
- Institutional aid (scholarships, assistantships)
- Work, savings, or family contributions
This is exactly the concern being raised in coverage about nursing, social work, counseling, OT/PT, PAs, etc.—fields that are licensure-intensive, often underpaid compared to debt levels, and now losing access to the higher “professional” cap.
Workforce & equity impact
Advocacy groups are warning that, by giving the higher cap mainly to physicians, lawyers, pharmacists, dentists, etc., and not to counseling/therapy and similar fields, the law:
- May worsen behavioral health shortages, especially in underserved areas
- Disproportionately affects women and students of color, since many of the excluded fields (nursing, social work, counseling) are heavily female and more diverse
9. If you’re thinking about students in counseling / therapy, practically:
If you’re advising students or designing programs, the big practical takeaways are:
- Future students (post-July 2026) in counseling/therapy programs should be told very clearly:
- The federal loan caps they’ll face ($20,500/year, $100,000 total).
- That Grad PLUS is not available; Parent PLUS is tightly capped and ineligible for RAP.
- That their main repayment option will likely be RAP, with a 30-year horizon.
- Program affordability becomes a strategic question:
- Schools may need to lower tuition, expand scholarships/assistantships, or create structured part-time options.
- Associations representing counselors/therapists can use this to argue that behavioral health should meet the same “professional degree” standard as medicine or clinical psychology.
- Advocacy isn’t over yet:
- The Department just concluded negotiated rulemaking and will still go through a public comment period on the regulations implementing these provisions. U.S. Department of Education
- National organizations (for counseling, social work, OT/PT, nursing, etc.) are already mobilizing to push for changes to how “professional degree” is applied.