Education Department Reclassifies Theology Programs as Student Loan Rules Continue to Shift
The U.S. Department of Education has reclassified most graduate theology programs as nonprofessional for federal student loan purposes, reducing the amount eligible students can borrow under new loan limits that took effect July 1. The change follows a federal court order that temporarily blocked portions of the department’s new definition of professional degree programs and adds another layer of uncertainty as institutions and borrowers adapt to sweeping federal student loan reforms.
The update comes just days after the department restored nursing and numerous other healthcare programs to professional status in response to the court’s preliminary injunction. While those programs regained access to higher borrowing limits, theology programs were removed from the department’s revised list, with the exception of Master of Divinity and Master of Hebrew Letters programs, which continue to qualify as professional degrees.
Theology programs move under lower borrowing caps
Under the revised guidance, students enrolled in most graduate theology programs are now subject to federal Direct Unsubsidized Loan limits of:
- $20,500 annually
- $100,000 in aggregate
Students enrolled in qualifying professional degree programs remain eligible for:
- $50,000 annually
- $200,000 in aggregate
The Department of Education said the professional degree designation is intended solely for administering statutory loan limits and “is not a value judgment about the importance of programs.” The department has argued that the new borrowing caps are designed to reduce excessive graduate borrowing and encourage institutions to control educational costs.
Court order reshaped the department’s implementation
The latest revision stems from a June 24 order issued by the U.S. District Court for the District of Columbia, which temporarily blocked portions of the department’s regulatory definition of professional degree programs while litigation continues.
Following the ruling, Federal Student Aid published an interim list expanding the number of qualifying professional programs from 11 to 29. The updated list restored several healthcare disciplines, including advanced nursing, physician assistant, physical therapy, occupational therapy, speech-language pathology and audiology programs. Theology, however, was largely removed, leaving only divinity and rabbinical studies programs within the professional category.
The department has said it believes its original rule is lawful and will continue defending it in court, but it will administer loan limits under the court’s temporary order while litigation proceeds.
Limited impact expected for many theology students
John Cavadini, director of the McGrath Institute for Church Life at the University of Notre Dame, told USA Today that the practical effect may be modest for many students.
He noted that doctoral theology programs generally do not lead directly to licensed professions and often prepare graduates for academic or ministry-related careers with relatively modest earnings. As a result, many students may not require borrowing beyond the new graduate loan limits.
According to MinistryWatch, approximately 70,000 students are enrolled in graduate or doctoral theology programs nationwide, with more than one-third pursuing Master of Divinity degrees that remain eligible for the higher professional borrowing limits.
Another development in a broader student loan overhaul
The theology reclassification is the latest change in a rapidly evolving federal student loan landscape that Receivables Info has been following throughout 2026.
Recent developments include:
- The July 1 implementation of the Department of Education’s RISE regulations and broader student loan reforms.
- Elimination of the Grad PLUS loan program for new borrowers.
- New lifetime and annual borrowing caps for graduate and professional students.
- Introduction of new federal repayment options replacing existing income-driven repayment structures for future borrowers.
- Ongoing litigation challenging multiple portions of the department’s implementation of the new law.
- The federal government’s resumption of involuntary collections on defaulted federal student loans after a five-year pandemic-era pause.
The latest court challenge illustrates that implementation remains fluid, particularly for graduate and professional education programs whose eligibility for higher borrowing limits may continue to change as litigation advances.
