The Department of Education’s recent proposal to narrow the definition of “professional degrees” has sparked heated debate. Under the draft rule, only medicine, law, dentistry, and pharmacy would retain professional status for federal student loan purposes. Programs such as nursing, physician assistant, occupational therapy, and public health would be reclassified as graduate degrees.
This change appears to diminish the recognition of critical healthcare professions. Headlines have emphasized the negative connotation: nursing and physician assistant programs “downgraded” from professional to graduate status, potentially discouraging students from entering fields already facing shortages. Yet beneath the surface, the proposal represents a structural attempt to rein in runaway student debt—a problem fueled by decades of tuition inflation, easy access to government-backed loans, and declining returns on investment for many graduate degrees.
While in no way supporting the Department of Education’s clumsy execution and lack of second-order thinking, this article explores the broader context: how college costs have outpaced inflation, how student debt has ballooned relative to graduate incomes, and how the ROI of graduate education has eroded. Together, these trends support the case for tightening loan availability to force students and institutions alike to reassess the value versus cost of higher education.
Tuition Inflation: Outpacing the Broader Economy
One of the most striking realities of higher education is how rapidly costs have risen compared to general inflation.
- Since 1977, college tuition has increased at an average annual rate of 6%, compared to 3.5% for overall inflation.
- Between 1980 and 2020, the average cost of tuition, fees, room, and board for undergraduates rose 169%, far faster than the consumer price index.
- Over the past 20 years (2005–2025), tuition and fees at private universities rose 112% (32% after inflation adjustment), while public in-state tuition rose 107% (29% after inflation adjustment).
This relentless rise in costs has been fueled in part by the availability of federal student loans. Because loans are guaranteed by the government, institutions face little market pressure to keep tuition affordable. Colleges and universities have become predatory with a vulnerable and inexperienced population. Students can borrow almost unlimited amounts, particularly in professional programs, and colleges know that access to financing will cover whatever price they set.
The Department of Education’s clumsy proposal to shrink the definition of professional degrees—and thereby reduce borrowing limits—directly addresses this dynamic. By capping the amount students can borrow, the government introduces a constraint that could force institutions to reconsider tuition escalation. Without the safety net of unlimited federal loans, schools may need to align pricing more closely with market realities.
Student Debt: Rising Faster Than Graduate Incomes
The second pillar of the argument is the growth of student debt relative to graduate earnings.
- Total U.S. student loan debt now exceeds $1.75 trillion, with an average borrower owing $28,950.
- For bachelor’s degree completers, average debt rose from $16,900 in 2003–04 to $26,400 in 2019–20.
- For master’s degree recipients, cumulative debt doubled from $32,700 in 2003–04 to $67,800 in 2019–20.
- Graduate borrowing surged after PLUS loans became widely available in 2007, with average annual borrowing rising from $10,500 in 1995–96 to $25,400 in 2019–20.
Meanwhile, starting salaries have not kept pace. Median starting salaries for new graduates hover around $55,000–$60,000, meaning debt often represents 40–50% of first-year income. This ratio is far higher than in previous decades, when debt burdens were smaller and salaries more easily covered repayment obligations.
The result is a generation of graduates entering the workforce with limited financial flexibility. High debt loads delay homeownership, retirement savings, and family formation. They also constrain career choices, pushing graduates toward higher-paying roles even if their passion lies in lower-paying but socially critical fields such as community health or nonprofit service.
By lowering borrowing limits for reclassified programs, the Department of Education’s proposal could reduce this imbalance. Students would graduate with smaller debt loads relative to their incomes, enabling greater career flexibility and reducing long-term financial strain.
Graduate ROI: Declining Returns on Investment
The third and perhaps most compelling argument relates to the return on investment (ROI) of graduate degrees.
- A comprehensive ROI study of 14,000 graduate programs found the median master’s degree adds only $83,000 in lifetime earnings after costs.
- 40% of master’s degrees have no positive financial ROI—graduates earn less over their lifetimes than they spend on tuition and foregone income.
- MBA programs, despite their popularity, often show negative ROI, while law and medical degrees remain exceptions with strong returns.
- Rising debt costs are eroding ROI: graduate borrowing has increased sharply, while lifetime income gains have not kept pace.
This erosion of ROI undermines the traditional justification for graduate education. For decades, the assumption was that advanced degrees guaranteed higher lifetime earnings, making debt a rational investment. Today, that assumption no longer holds true across many fields.
The Department of Education’s proposal implicitly acknowledges this reality. By limiting borrowing for degrees with weaker ROI, the government nudges students to weigh the financial value of their educational choices. It also signals to institutions that they must demonstrate tangible returns if they wish to justify high tuition costs.
Balancing Recognition and Debt Sustainability
Critics of the proposal rightly point out that reclassifying nursing and physician assistant programs carries symbolic weight. These are vital professions, and downgrading their status from “professional” to “graduate” risks sending the wrong message about their importance. Moreover, lower borrowing limits could discourage students from entering fields already facing shortages.
Yet the broader context cannot be ignored. Tuition inflation, rising debt burdens, and declining ROI have created a system where students often graduate with unsustainable financial obligations. The Department of Education’s proposal is not about diminishing professions—it is about recalibrating the financial structures that underpin higher education.
By tightening loan availability, the government introduces a mechanism for debt sustainability. Students will be forced to assess the value versus cost of their education, and institutions will face pressure to align tuition with market realities. The result could be a healthier balance between recognition of professional roles and financial viability for graduates.
The Case for Market Discipline
Higher education has long operated in a bubble insulated from market discipline. Easy access to government-backed loans allowed institutions to raise prices without fear of losing students. Graduates bore the burden, often for decades, while institutions reaped the benefits.
The Department of Education’s proposal represents a step toward restoring market discipline. By capping borrowing, the government forces both students and institutions to confront the financial realities of higher education.
- Students must evaluate whether the expected income gains justify the debt.
- Institutions must justify tuition levels in terms of tangible ROI.
- The system as a whole must shift from debt-driven growth to value-driven sustainability.
This is not a panacea. Structural reforms in higher education financing will require broader changes, including transparency in program outcomes, accountability for tuition pricing, and expansion of alternative pathways such as apprenticeships and employer-sponsored training. But tightening loan availability is a critical first step.
Conclusion: A Necessary Recalibration
The Department of Education’s ignorant and diminutive proposal to narrow the definition of professional degrees has been framed as a downgrade for nursing and physician assistant programs. That framing captures the real but symbolic impact but misses the structural intent.
Tuition inflation has far outpaced general inflation. Student debt has risen disproportionately relative to graduate incomes. The ROI of many graduate degrees has declined, leaving graduates with unsustainable financial burdens. Together, these trends justify a recalibration of loan availability.
By lowering borrowing limits, the government introduces a constraint that could reduce debt burdens, restore market discipline, and force institutions to align tuition with value. While the proposal carries a negative connotation for certain professions, it also represents a step toward debt sustainability—a benefit that could ripple across the workforce and society at large.
In the end, the debate is not about whether nursing or physician assistants are “professional” – they are! It is about whether higher education can continue to justify escalating costs in a system where debt burdens increasingly outweigh returns. The Department of Education’s proposal challenges us to confront that reality—and to build a system where recognition and sustainability go hand in hand.