Dept. of Education releases final rule on professional degree programs

New regulations going into effect July 1 put annual and lifetime caps on federal student loans and create new guidelines for repayment.

The Department of Education’s final rule expanded on previous language clarifying the narrow application of the term “professional degree” for advanced degrees, but the rule did not expand the list of professional degree programs to other professions beyond those in the proposed rule that was released in January.

The final rule, published Friday in the Federal Register, eliminated unlimited borrowing under the Graduate PLUS Program. Effective for loans made on or after July 1, borrowing amounts for students in 11 professional degree programs are subject to an annual limit of $50,000 and an aggregate lifetime limit of $200,000.

Graduate students in other programs — including accounting, engineering, nursing, and a host of other professions — are subject to an annual limit of $20,500, with an aggregate lifetime limit of $100,000.

The 11 designated professional degree programs are law, medicine, pharmacy, dentistry, chiropractic, optometry, osteopathic medicine, podiatry, veterinary medicine, clinical psychology, and theology.

The AICPA, in a February letter, requested that the Department of Education incorporate specific language explaining its definition of degrees.

“The Higher Education Act uses the term ‘professional student’ in an entirely different context and defines that term in a manner that is quite different than the common usage of the word ‘professional,’” the final rule said. “In this rule, we interpret the law as written and do not claim that degrees that do not meet the definition of ‘professional student’ are of lesser worth.”

The final rule addressed accounting specifically, noting CPA licensure requirements:

“For example, to obtain licensure as a certified public accountant, an applicant must have completed 150 credit hours of coursework but is not required to have earned a specific post-baccalaureate degree, which is relevant when the department determines whether a specific degree is a professional degree,” the final rule said. “The department also disagrees with commenters that advanced accounting degrees beyond the baccalaureate level should be considered professional degrees. As the commenters themselves concede, these master’s degrees are not required, in general, to become a [CPA].”

The AICPA’s February letter said, in part: “Accounting is a profession. CPAs are state-licensed, subject to rigorous education requirements beyond a standard bachelor’s degree, validated by the Uniform CPA Examination, and governed by ethics and competency standards.”

— To comment on this article or to suggest an idea for another article, contact Neil Amato at Neil.Amato@aicpa-cima.com.