North Carolina already faces severe access issues to behavioral health professionals. Nearly every county in the state is a designated mental health professional shortage area, and demand for mental health and substance use services continues to grow. Yet a change in federal student loan policy will make it harder for future social workers, counselors, and other behavioral health professionals to enter the workforce. In this blog, guest authors Dr. Lisa de Saxe Zerden and Dr. Brianna M. Lombardi explain what happened and why it matters so much to the health and well-being of North Carolina’s behavioral health system.
Over the past year, federal student loan policy changes have created new challenges for the social work and behavioral health workforce in North Carolina and across the nation. Under the 2025 federal budget reconciliation, commonly referred to as the “One Big Beautiful Bill Act,” and its Reimagining and Improving Student Education (RISE) negotiated rulemaking, the federal government eliminated the GradPlus Loan Program and created a two-tiered graduate borrowing system: a $20,500 annual cap for “graduate” degrees and $50,000 for “professional” degrees.1 Finalized in May 2026, the rule defined "professional" degrees narrowly to include only medicine, law, dentistry, pharmacy, optometry, podiatry, chiropractic, theology, and doctoral clinical psychology.2
In response, North Carolina Attorney General Jeff Jackson joined a coalition of 25 state attorneys general in filing suit against the US Department of Education, arguing the rule contradicted congressional intent and would worsen existing workforce shortages while pushing students into costlier private loans.3, 4 One week before the rule took effect on July 1, 2026, a federal judge temporarily blocked portions of "professional” degree definition, expanding eligibility for higher borrowing limits to now include audiology, physician assistant programs, Doctor of Nursing Practice, and Doctor of Psychology programs.5 Social work, counseling, and marriage and family therapy remain excluded—the three degree programs that together produce the overwhelming majority of North Carolina’s graduate-level behavioral health workforce, with social work being the largest.6
The implementation of this rule has direct implications for social work and behavioral health access across North Carolina and the nation.2, 7
North Carolina's current behavioral health workforce is stretched to meet increasing demand and unevenly distributed limiting access. Ninety-seven of the state's 100 counties are designated mental health professional shortage areas,7 and while the state has approximately 30,800 graduate-level behavioral health clinicians, Licensed Clinical Social Workers (LCSWs) and Licensed Clinical Mental Health Counselors (LCMHCs) account for roughly 85% of that total.6 National projections point to a shortfall of tens of thousands of social workers by 2030,8 concentrated in rural counties already facing the greatest unmet need. That burden is evident in county-level workforce data: twelve counties have fewer than four social workers per 10,000 residents, two have none at all, and only three counties—Orange, Buncombe, and Durham—have reached 30 or more LCSWs per 10,000 residents.6
North Carolina has built a strong behavioral health workforce pipeline through 13 accredited Master of Social Work (MSW) programs and a network of accredited counseling programs which new federal loan limits place at risk. Financing gaps and limits on borrowing will most heavily affect first-generation, low-income, and students of color, who are essential to building a workforce that reflects and serves North Carolina communities.9, 10 Private loans, the likely alternative for students who cannot cover costs through federal aid alone, carry significantly higher interest rates and lack the borrower protections available through federal programs, including income-driven repayment and Public Service Loan Forgiveness.2
For students without financial safety nets, these terms may effectively prevent enrollment altogether. The likely consequences are clear: fewer students entering behavioral health professions today means fewer clinicians, supervisors, and mentors available tomorrow. Importantly, students enrolled before June 30, 2026, with a disbursed loan retain pre-RISE limits and Grad PLUS access for up to three years and should confirm eligibility with their financial aid offices immediately. This protection applies only to current students, however, and does little for those deciding whether to pursue social work or other behavioral health degrees, many of whom may conclude that the financial uncertainty outweighs the benefits despite significant and growing workforce need.
North Carolina's behavioral health workforce cannot be solved without a steady pipeline of social workers, counselors, and other behavioral health professionals. To meet growing demand, the state must protect that pipeline, expand workforce incentive programs, and respond quickly to workforce to emerging threats, including federal student loan changes that may put these goals at risk.
Multiple legal challenges and ongoing advocacy efforts mean that the list of graduate training programs that qualify for higher federal loan limits could change again. For North Carolina, where behavioral health shortages are especially acute in rural and underserved communities, this undermines long-term workforce planning. While the definitional changes adopted since the original RISE negotiated rulemaking—and the current temporary stay—may provide limited relief for some professions, they do not extend to all affected workforce sectors. More importantly, these actions fail to address the underlying problem: persistent uncertainty about the affordability of professional education for the workforce most needed to expand access to mental health and substance use services across North Carolina.
Expanding loan repayment and workforce incentive programs targeted at MSWs, LCSWs, and other behavioral health professionals practicing in shortage areas is one immediate response. Building on federal programs such as Behavioral Health Workforce Education and Training (BHWET)11-14 and existing state initiatives, including North Carolina's Licensed Workforce Loan Repayment Program (now paused due to overwhelming interest),15 policymakers can help offset the financing uncertainty created by the rule. The recently launched North Carolina Social Work Coalition's Public Service Leadership Program, designed to support the development of 2,000 additional social workers across 25 colleges and universities, was built on the assumption that students could access sufficient federal financing to complete graduate training.16 If that assumption no longer holds, neither do the workforce investments built on it.
As a new academic year begins, graduate programs and financial aid offices will help prospective students navigate changing borrowing limits and alternative financing options. The larger concern, however, is not simply whether individual students can finance their education but whether North Carolina can sustain the workforce infrastructure necessary to meet growing social and behavioral health needs. The federal court stay provides temporary relief for some health professions while leaving unresolved questions about educational affordability for social work and other professions that form the backbone of the state's behavioral health system. For health care organizations, hospital, community providers, and public agencies already struggling to recruit and retain clinicians, waiting for the courts to resolve this is itself a risk. Protecting access to graduate social work and behavioral health education is not merely an educational concern, it is a health system imperative.
A behavioral health system is only as strong as the workforce behind it. When financing structures support some essential health professions while leaving others behind, the result is not a stronger workforce but a fragmented one. North Carolina cannot build a sustainable health and behavioral health infrastructure without broad access to professional education.
_______________________________________________
Written by Guest Authors
Lisa de Saxe Zerden, PhD, MSW
Professor, UNC School of Social Work
Deputy Director, UNC Behavioral Health Workforce Research Center
Brianna M. Lombardi, PhD, MSW
Research Assistant Professor, UNC School of Social Work
Co-Director, Program on Health Workforce Research & Policy
Director, UNC Behavioral Health Workforce Research Center
Deputy Director, Carolina Health Workforce Research Center
Assistant Professor, Department of Family Medicine
_______________________________________________