A coalition of Democratic-led states and the District of Columbia filed a lawsuit challenging new federal caps on student loans announced by the Trump administration, arguing the limits will restrict access to education in critical health care fields. The lawsuit was filed Tuesday and includes plaintiffs representing 24 states and the District of Columbia, according to the Associated Press. The new caps are scheduled to take effect in July.
New York Attorney General Letitia James said the policy would harm communities by reducing the number of health care providers. In a written statement, James said, “This rule will shut talented people out of critical professions and leave communities with fewer healthcare providers they desperately need,” and added, “We cannot afford fewer nurses, fewer providers, or fewer opportunities for working people to enter these essential fields.”
The plaintiffs’ complaint focuses on a shift from how loans were available previously. The Associated Press reported that, before the new rules, graduate students could borrow up to the cost of their degree, while the new cap structure limits borrowing for certain categories of programs. The plaintiffs argued that the new limits will disproportionately affect students pursuing healthcare degrees, particularly those needed for workforce shortages.
The dispute grows out of a 2025 law Congress passed, described in the AP report as the One Big Beautiful Bill Act. That law enacted new federal student loan caps, setting a $100,000 cap for programs designated as “graduate” and a $200,000 cap for professional degrees, with both categories changing how much students can borrow for their education.
The Education Department defended the caps as a way to influence tuition costs. The AP reported that the department’s Under Secretary of Education Nicholas Kent said in a written statement that the rules were “already incentivizing colleges and universities to lower tuition.” Kent also argued that the lawsuit reflects a focus on institutions rather than students, saying, “Clearly, these Democratic governors and attorneys general are more concerned about institutions’ bottom-line rather than American students and families’ ability to access affordable postsecondary education.”
A central point in the case is how the Education Department defines “professional degrees.” The AP reported that the department’s definition of professional degrees includes pharmacy, dentistry, veterinary medicine, chiropractic, law, medicine, optometry, osteopathic medicine, podiatry and theology. Other healthcare fields were not included in the definition, including nursing, physical therapy, dental hygiene, social work and occupational therapy, the AP said. The AP also reported that other certification- and licensure-related fields such as accounting and education were excluded from the professional-degree definition used for the caps.
The changes prompted anger among healthcare professions that were not included in the department’s definition, according to the AP report. The American Nurses Association said in a statement that the rule would have real-world impacts, with Jennifer Mensick Kennedy, the group’s president, saying, “This rule will be felt in real communities, for example, in rural areas where nurse practitioners, midwives, and nurse anesthesiologists are often the only providers of core care services,” in connection with the department’s final rule issued last month.