24 States Take Legal Action Against Federal Loan Caps Threatening Healthcare Education
A multistate coalition is suing the Trump administration over new federal student loan limits that could block nurses and other healthcare professionals from advancing their careers.
Two Dozen States Challenge Trump Administration's Healthcare Loan Restrictions
A coalition of 24 states and Washington, D.C., has filed a federal lawsuit targeting a Trump administration rule that significantly restricts access to federal student loans for graduate students pursuing degrees in nursing, physical therapy, and other critical healthcare fields.
New York Attorney General Letitia James captured the urgency of the coalition's position in a pointed statement: "Higher education is expensive, and our health care system is already under immense strain. This rule will shut talented people out of critical professions and leave communities with fewer health care providers they desperately need."
What the New Loan Rules Actually Change
The legal battle centers on two interconnected policy shifts that have drawn fierce opposition from healthcare advocacy groups, including the American Nurses Association.
The first change stems from the One Big Beautiful Bill Act, passed by Republicans, which dramatically reduces borrowing limits for graduate students. While undergraduate borrowers — including those in nursing programs — remain unaffected, graduate students now face an annual borrowing cap of $20,500 and a lifetime ceiling of $100,000. Previously, students could borrow up to the full cost of attendance for their program.
The Professional Degree Exemption Controversy
The second — and more legally contentious — change involves how the Trump administration has defined which graduate programs qualify as "professional degrees," a classification that allows for higher borrowing limits of up to $50,000 annually and $200,000 total.
The administration has narrowed that professional degree designation to just 11 fields: chiropractic, clinical psychology, dentistry, law, medicine, optometry, osteopathic medicine, pharmacy, podiatry, theology, and veterinary medicine. Notably absent from this list are nursing, physical therapy, and nurse anesthesia — fields with significant workforce shortages and growing demand.
The lawsuit argues that the administration "issued a final rule unlawfully narrowing" an established federal definition of professional degrees, imposing restrictions that were never authorized by Congress. Plaintiffs also point out a glaring historical oversight: the department's reference list of professional degree examples was drawn from a regulation last updated in the 1950s — decades before modern graduate nursing and allied health programs even existed.
Healthcare Advocates Sound the Alarm
The American Nurses Association responded to the finalized rule with sharp criticism. Association President Jennifer Mensik Kennedy warned that the consequences would be felt far beyond university campuses.
"This Department of Education has chosen to make it harder for nurses to advance their education and their careers," Kennedy said. "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 echoed these concerns, cautioning that under the new framework, nursing students may be forced to turn to expensive private loans or abandon advanced practice programs altogether.
A Divided Response: Downplaying the Impact
Not everyone views the restrictions as catastrophic. Preston Cooper, a researcher at the conservative-leaning American Enterprise Institute, argued that the alarm surrounding the rule outpaces its likely real-world effects, suggesting the caps would only meaningfully impact a narrow range of programs with unusually high tuition costs.
The Education Department itself noted that the vast majority of the nursing workforce — approximately 80% — does not hold a graduate degree, and that the changes leave undergraduate nursing pathways completely intact.
Education Secretary McMahon Faces Bipartisan Pressure
Despite those defenses, the rule has generated rare bipartisan pushback. During a recent appearance before the House education committee, Education Secretary Linda McMahon was challenged by Republican Representative Randy Fine of Florida, who questioned whether limiting loans in a field already facing critical shortages was sound policy.
McMahon offered a two-part defense: first, that the cost of most advanced nursing degrees would still fall within or close to the new caps; and second, that the borrowing limits are designed to pressure colleges into reducing their tuition.
"It is our overall goal to bring down the cost of college and education," McMahon told lawmakers. "If we can bring down the cost for nurses in schools, we can get more students to apply."
Whether universities will respond by lowering tuition — or whether students will simply be left with fewer options — remains to be seen. Until that question is answered, both borrowers and policymakers will be watching closely.
