24 States Sue Trump Administration Over Graduate Student Loan Limits
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A coalition of 24 states and Washington D.C. has filed a federal lawsuit challenging a Trump administration rule that narrows which graduate degrees qualify for higher federal student loan limits. The rule, implementing a 2023 Republican law, caps annual graduate borrowing at $20,500 for most programs, excluding nursing and physical therapy from a list of 'professional' degrees eligible for higher caps. The lawsuit argues the changes will exacerbate healthcare worker shortages.
Facts First
- A 24-state coalition is suing over a rule narrowing loan access for graduate students.
- The rule caps most graduate borrowing at $20,500 annually and $100,000 total, down from the full cost of attendance.
- Eleven 'professional' degree categories are exempt and can borrow up to $50,000 annually, but nursing and physical therapy are excluded.
- The Education Department states the caps do not affect undergraduate nursing programs, where 80% of nurses are trained.
- Lawmakers have raised concerns that the rule could worsen healthcare worker shortages.
What Happened
A coalition of 24 states and the District of Columbia filed a lawsuit in federal court on Tuesday challenging a Trump administration rule regarding federal student loan access for certain graduate degrees. The rule implements changes from the One Big Beautiful Bill Act (OBBB Act), a law passed by Republicans last year that established new limits on graduate student loans. The new law caps annual graduate borrowing for most students at $20,500 with a total limit of $100,000, whereas previously students could borrow up to the full cost of their program. The Trump administration's rule narrows the definition of 'professional' graduate degrees that qualify for higher loan limits of $50,000 annually and $200,000 overall. The 11 exempted professional degree categories are chiropractic, clinical psychology, dentistry, law, medicine, optometry, osteopathic medicine, pharmacy, podiatry, theology, and veterinary medicine. Nursing, physical therapy, and nurse anesthesia are excluded from this list.
Why this Matters to You
If you or a family member are considering a graduate degree in nursing, physical therapy, or a similar field, your ability to finance that education could be significantly constrained. You may need to seek more expensive private loans or reconsider your career path due to the lower federal borrowing caps. For communities, this rule could worsen existing shortages of healthcare professionals like nurse practitioners and physical therapists, potentially affecting your access to care and lengthening wait times for appointments. The Education Department has noted that 80% of the nursing workforce does not hold a graduate degree, and undergraduate nursing programs are not affected, which may limit the immediate impact on the overall nursing supply.
What's Next
The lawsuit will proceed through the federal court system, where a judge may issue an injunction to temporarily block the rule while the case is heard. The legal challenge could delay or alter the implementation of the new borrowing caps. Congressional scrutiny is likely to continue; Education Secretary Linda McMahon recently appeared before the House education committee, where Republican Rep. Randy Fine of Florida questioned her about the rule's impact on healthcare worker shortages. This suggests the policy may face further legislative or administrative adjustments depending on the lawsuit's outcome and ongoing political pressure.