A coalition of 24 states and the District of Columbia filed a lawsuit in federal court Tuesday challenging a Trump administration rule that limits access to federal student loans for borrowers earning a graduate degree in several popular, healthcare-related fields.
"Higher education is expensive, and our health care system is already under immense strain," New York Attorney General Letitia James said in a statement. "This rule will shut talented people out of critical professions and leave communities with fewer health care providers they desperately need."
At issue is a pair of complex changes that, taken together, drew the ire of the American Nurses Association and triggered Tuesday's lawsuit.
First, Republicans passed new limits on graduate student loans as part of last year's One Big Beautiful Bill Act. The law does not change limits for undergraduate borrowers, including those attending undergraduate nursing programs, but it dramatically scales back how much graduate students can borrow. Previously, grad students could borrow up to the cost of their program, but the new limits cap annual borrowing for most at $20,500 with a total limit of $100,000.
These limits are legal, if controversial.
Arizona, California, North Carolina, Kentucky and Nevada are among the states that joined the lawsuit, which focuses on a rule that essentially outlines an exemption to the limits.
In implementing the changes in the One Big Beautiful Bill Act, the Trump administration has scaled back the types of graduate degrees that qualify as "professional" and for which students can borrow up to $50,000 a year and $200,000 overall. It is limiting those exempted programs to 11 categories: chiropractic, clinical psychology, dentistry, law, medicine, optometry, osteopathic medicine, pharmacy, podiatry, theology and veterinary medicine. Nursing, physical therapy and nurse anesthesia are some of the many healthcare-related programs excluded from that short list of professional degrees.
A press release announcing the lawsuit argues that the Trump administration "issued a final rule unlawfully narrowing" the pre-existing federal definition of a professional degree. It says, "The rule imposes new restrictions not enacted by Congress, leaving many health care and other professional degree programs unable to qualify for the higher loan limits."
What's more, in the lawsuit itself, the plaintiffs point out that the department's list of professional degree examples "was taken from a regulation that had not been changed since the 1950s, a time when graduate programs in nursing and other healthcare professions barely existed."
Late last year, in a fact-sheet titled "Myth vs. Fact," the Education Department noted that these new loan caps "are limited to graduate programs and have no impact on undergraduate nursing programs, including four-year bachelor's of science in nursing degrees and two-year associate's degrees in nursing. 80% of the nursing workforce does not have a graduate degree."
Still, last month, when the Trump administration finalized its rule, the American Nurses Association said it was "profoundly dismayed."
"This Department of Education has chosen to make it harder for nurses to advance their education and their careers," Jennifer Mensik Kennedy, president of the American Nurses Association, said in a statement.
She continued: "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."
In a February fact sheet about the new limits, the American Association of Colleges of Nursing warned, under the rule, nursing students "could be forced to seek high-interest private loans or abandon advanced practice education."
In a study of the new limits, Preston Cooper of the conservative-leaning American Enterprise Institute downplayed the impact: "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."
Nevertheless, the bipartisan blowback to the department's rule has put Education Secretary Linda McMahon on the defensive.
Last week, appearing before the House education committee, McMahon was asked by Republican Rep. Randy Fine of Florida: "Does it make sense for us to take a field where we have real shortages and create a situation where we may not be able to create the [healthcare workers] we need, where we already don't have enough?"
McMahon offered two arguments in defense of these new loan limits and the department's controversial rule. First, that the cost of most advanced nursing degrees, for example, would still fall within or near the new caps and that undergraduate nursing programs will not be affected.
Second, she argued that these caps are intended to force colleges to lower their prices.
"It is our overall goal to bring down the cost of college and education," McMahon told Fine. "And I do think that, relative to the shortages we're having, if we can bring down the cost for nurses in schools, we can get more students to apply."
The challenge for McMahon – and for borrowers – is waiting to see if schools actually do as she hopes and lower their costs. If they don't, the secretary likely has more tough questions ahead.
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