Geoff Bennett:
More changes are under way for federal student loans, with major implications for current and future graduate students.
A federal judge has temporarily blocked parts of the Education Department’s new loan limits, including restrictions affecting some professional degree programs.
William Brangham has more.
William Brangham:
Geoff, the Education Department, prompted by a successful lawsuit, has now put out its revised list of the graduate programs that are eligible for higher student loans.
Previously, the department had limited the amount a student could borrow for graduate programs that train nurses, physician assistants, and certain other roles. But there are other changes under way. A new provision championed by Republicans just took effect, which could limit the money available for certain colleges and certain professions.
It requires these programs prove that graduates, on average, earn more than high school graduates. If not, they could lose access to federal student loans.
So to help navigate these changes and who may be most affected by them, we are joined again by Danielle Douglas-Gabriel. She’s the national higher education reporter for The Washington Post.
Danielle, thank you so much for being here again.
So, as we have been trying to look at all the different twists and turns with regards to federal law about student loans, there’s this new wrinkle now. The Department of Education, because of this lawsuit, has put out this new list of programs that are eligible for higher student loan limits, including programs that covered nurse training and physician assistant training.
Can you help us understand why the department wanted to limit some of those?
Danielle Douglas-Gabriel, The Washington Post:
Well, first, thanks for having me.
I think the objective from the department was to really try to curb graduate borrowing. As you remember, the Republican tax and spending bill from last year really instituted a bunch of changes to the federal student loan system, one of them being instituted caps where none had existed when it came to graduate borrowing, as well as parent borrowing for undergrads.
In the graduate space, the law listed about 11 examples of what they would consider professional degree programs, programs that would require more borrowing, up to $50,000 a year or a lifetime of $200,000, like law or medicine. In doing so, there was a lot of ignoring of a lot of professions and fields that normally would have qualified for higher loan limits under kind of Congress’ definition of what a professional degree would be.
But the department, in writing out the rules for this particular cap, added all these additional criteria to this professional designation, which really limited how many fields could qualify. In doing so, they left out nursing, physician assistants, and that led these organizations that support such groups to file a lawsuit.
Now, keep in mind this is a temporary order. The judge said that they will block this particular definition while this litigation is ongoing. And, in response, the department expanded its list. This is not final, especially since the Department of Education has vowed to fight and it could potentially be successful in doing so.
But for the time being, there is a list that went from 11 to about 29 different professional degrees that now qualify for the higher loan limits.
William Brangham:
OK, so now let’s pivot to this do no harm accountability test.
It sounds like the department is saying that, if you, graduate programs, do not churn out graduates that earn more than a high school graduate, maybe you should not be receiving the benefit of federal student loans. Is that the argument that they are making?
Danielle Douglas-Gabriel:
That’s the crux of it.
I mean, for undergraduate programs — because this applies to all schools and all degree programs, which is different from some of the accountability rules we’d had previously, such as gainful employment, which really focused on career and vocational training. This is for everybody.
If you’re in an undergraduate program and your graduates do not make as much as the median high school graduate, then that’s when you have to start worrying about your eligibility. If you’re in a graduate program, you start worrying about your eligibility if your graduates don’t make as much as a bachelor’s degree graduate.
Now, to be clear in the first year, you get a warning that students who are applying to your programs will receive and say that, hey, the outcomes for this program isn’t so great. Now, if you failed this test in two consecutive years, this is when the stakes get really high, where you could potentially lose access to federal student loans.
And if the outcomes are especially bad, you could also lose outcome — lose access to Pell Grants. These rules probably wouldn’t be fully realized and felt by schools until 2028. So there is some time, and what I expect we’re going to see, and what I have heard from my sources is that schools are already judging and looking at all of their programs to see which ones would fail and which ones would pass.
So they’re starting to do the legwork to try to avoid the worst of the consequences.
William Brangham:
And how are schools reacting to this new measure? I mean, I understand this will really impact some for-profit schools, but also schools that are that teach arts and social sciences that might argue that how much you make is not necessarily the best way to measure whether you ought to get an education in that program.
Danielle Douglas-Gabriel:
I mean, there’s a lot of consternation among a lot of different programs, definitely cosmetology schools for — in the vocational training space, certainly religious studies schools, where their graduates don’t make a whole lot of money.
I think another argument we’re seeing is that this period of time may not be the best time to capture the value of the degree. Many people don’t start to really earn more until they’re later into their career, so it seems a little unfair to judge them at that particular point.
But the overall argument is, we want to hold institutions accountable for making sure that students are not left worse off than when they started these programs. So we will have to really see how it’s going to play out over the next few years.
William Brangham:
So many complex changes.
Danielle Douglas-Gabriel of The Washington Post, thank you so much for being here.
Danielle Douglas-Gabriel:
Thank you.
