Attorneys general from 25 states and the District of Columbia have filed a lawsuit against the Trump administration to block an Education Department rule that limits which degree programs qualify for higher federal student loan limits.
The rule — finalized April 30 and set to take effect July 1 — classifies physician assistant, nurse anesthesia and other advanced healthcare programs as graduate rather than professional programs. As a result, federal loans for students in these fields would be capped at $20,500 annually rather than the $50,000 limit available to professional students under the One Big Beautiful Bill Act.
Six things to know about the lawsuit:
1. The lawsuit was filed May 19 in the U.S. District Court for the District of Maryland against the Education Department and Secretary Linda McMahon. It is co-led by Maryland Attorney General Anthony Brown and New York Attorney General Letitia James.
2. The coalition argues the department’s classification contradicts the OBBBA, which established separate borrowing limits for graduate and professional students and incorporated an existing regulatory definition of “professional degree.” The department added criteria to that definition in its April 30 final rule. The states note the Education Department acknowledged that several excluded programs — including those for advanced practice nurses and PAs — meet the original statutory definition but declined to classify them as such.
3. The rule also restricts a grandfathering provision in the law intended to protect currently enrolled students from the new caps. The coalition argues the department unlawfully stripped those protections from students who transfer schools or temporarily withdraw and re-enroll, even if they continue the same program of study.
4. The coalition is asking the court to block the rule from taking effect July 1. The states argue the department overstepped its authority by rewriting a definition Congress explicitly set in law and by limiting protections for students already enrolled in affected programs.
5. The student loan caps have drawn opposition from healthcare organizations and medical associations; they argue the classifications will worsen existing workforce shortages and limit access to care, particularly in rural and underserved communities. More than 75 health systems and other healthcare organizations formed a national coalition in February urging the department to reconsider. The PA Education Association and the American Academy of Physician Associates, which announced plans to challenge the rule in federal court when it was finalized, said May 19 they expect to file their own lawsuit within weeks. The American Nurses Association said May 19 it also intends to file a separate nurse-focused lawsuit challenging the rule alongside other nursing organizations.
6. The Education Department defended the rule in a May 19 statement to Becker’s, arguing the caps are already driving down tuition costs.
“After decades of unchecked student loan borrowing that gave schools no reason to control costs, these commonsense loan caps — created by Congress — are already incentivizing colleges and universities to lower tuition,” Under Secretary of Education Nicholas Kent said.
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