A coalition of 24 states and the District of Columbia filed suit Tuesday in federal court to challenge a Trump administration rule that the plaintiffs say narrows access to federal student loans for certain graduate degrees in healthcare and related fields. The plaintiffs argue the Education Department’s rule unlawfully tightens which programs qualify for higher federal borrowing limits, a change they say could reduce the number of healthcare professionals trained in some areas.
In a statement, New York Attorney General Letitia James said, “Higher education is expensive, and our health care system is already under immense strain,” adding that the rule, “will shut talented people out of critical professions and leave communities with fewer health care providers they desperately need.” The complaint, filed after the administration’s latest changes took effect, targets a pair of adjustments affecting graduate student borrowing caps and the way exemptions for “professional” degrees are defined.
The federal borrowing framework at the center of the case stems from changes tied to last year’s “One Big Beautiful Bill Act,” the lawsuit says. According to the reporting, the law does not change limits for undergraduate borrowers, including students attending undergraduate nursing programs, but it dramatically scales back graduate borrowing by setting lower caps for many students than what they could borrow previously.
NPR reported that under the new limits, graduate students who fall under the standard cap can borrow up to $20,500 per year with a total limit of $100,000. The rule’s impact, however, hinges on which graduate degree programs qualify for higher loan amounts. The administration narrowed the scope of degrees treated as “professional,” according to the reporting, limiting exempted programs to 11 categories including chiropractic, clinical psychology, dentistry, law, medicine, optometry, osteopathic medicine, pharmacy, podiatry, theology, and veterinary medicine.
The plaintiffs say those updated exemptions sweep out nursing and other healthcare-related programs. Nursing, physical therapy and nurse anesthesia are among the fields described in the reporting as excluded from the short list of exempted “professional” degrees. In the lawsuit and accompanying materials described by NPR, the challengers argue that the Education Department’s list of professional degree examples comes from a regulation that had not been changed since the 1950s, when graduate programs in those professions were less common.
The Education Department, NPR reported, has also said the graduate loan caps do not affect undergraduate nursing programs. A late-year fact sheet cited in the reporting, titled “Myth vs. Fact,” said the new loan caps are limited to graduate programs and have no impact on undergraduate nursing programs, including four-year bachelor’s degrees in nursing and two-year associate’s degrees in nursing. The fact sheet also asserted that 80% of the nursing workforce does not have a graduate degree.
NPR reported that the American Nurses Association said it was “profoundly dismayed” by the change when it was finalized last month. Jennifer Mensik Kennedy, the president of the American Nurses Association, said, “This Department of Education has chosen to make it harder for nurses to advance their education and their careers,” and added, “Make no mistake, this is not a technicality or a footnote. 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.”
The American Association of Colleges of Nursing also weighed in, warning in a February fact sheet cited by NPR that under the rule nursing students “could be forced to seek high-interest private loans or abandon advanced practice education.” The reporting also noted that Preston Cooper of the conservative-leaning American Enterprise Institute downplayed the impact, saying, “The rhetoric around new loan limits for nursing programs does not match the reality. The new caps will affect only a small number of programs charging exorbitant prices.”
As the legal challenge proceeds, Education Secretary Linda McMahon has defended the changes in congressional testimony. NPR reported that appearing before the House education committee last week, McMahon was questioned by Republican Rep. Randy Fine of Florida about whether the rule makes it harder to build the healthcare workforce. NPR reported that McMahon responded by arguing first that the cost of most advanced nursing degrees would still fall within or near the new caps, and second that the caps are intended to push colleges to lower prices.
“I t is our overall goal to bring down the cost of college and education,” McMahon told Fine, according to NPR’s account, and said that relative to current shortages, lowering the cost for nurses in schools could lead to more students applying. The challenge for McMahon—and for borrowers—will be whether colleges actually reduce tuition in ways that align with that goal, NPR said, as the rule’s effects may become clearer if schools do not adjust costs as expected.