Dozens of states sued the Education Department on Tuesday over the agency’s finalized loan caps that would limit the federal funds available to professional degree-seekers.
The limits officially go into effect on July 1. For borrowers going to medical school, law school, dentistry school, pharmacy school or other programs that the Education Department categorizes as “professional,” students would face a $200,000 aggregate limit for their time in that program and a lifetime limit of $257,000 for any federal student loan.
The complaint from 25 states and the District of Columbia argues that the Education Department is not acknowledging or including all programs and professional degrees. The lawsuit cites several degrees, including nursing, speech language pathology, physician assistant and physical therapy as programs the agency is overlooking.
The Washington Post reported on Tuesday that these gaps in particular could weaken the health care industry even further. By excluding certain degrees from the “professional” category, those students would face a tighter $100,000 limit intended for graduate students. Someone pursuing an advanced practice nursing degree, for example, would be limited to $20,500 annually.
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A bipartisan pair of senators, Jeff Merkley of Oregon and Mississippi’s Roger Wicker introduced a bill on Tuesday to overturn the Education Department’s removal of nursing from the list of professional degrees.
“This legislation would make nursing a more achievable profession by expanding the loan limits for nursing students. Classifying post-baccalaureate nursing degrees as professional degrees would give these students more financial freedom after graduation,” Wicker said in a press release.
A study by Philadelphia’s Federal Reserve Bank found that 28% of students in graduate or professional programs borrow more than the limits the agency is implementing.
The lawsuit called the agency’s distinction of professional degrees “arbitrary and capricious.” The states also questioned the blanket loan cap for all degrees in just two categories, rather than creating caps based on the price of the program.
But the Education Department previously said its goal with capping loans was to cut the price of these degree programs by forcing the hand of institutions. What remains unclear is whether institutions will large-scale lower costs as a response, or if the loan limits will create a greater burden for borrowers who may need to lean into the private loan system instead.
“For years, Democrats parroted illegal student loan forgiveness to ‘end the debt crisis’ and buy votes, and now the same people are fighting against the Trump Administration’s legal efforts to drive down the cost of college,” Nicholas Kent, the under secretary of education, told NOTUS in a statement. “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.”
A spokesperson for the Education Department also cited a few examples of institutions lowering costs after the loan caps were made public. The University of California at Irvine cut its tuition by 20% and the University of Santa Clara Law School created a $16,000 scholarship designed to “cover the cost of tuition for Santa Clara Law within new federal loan limits.”
The loan limits are a part of the “Working Families Tax Cuts” that President Donald Trump signed into law in July 2025. It’s been a long-stated goal of the administration to cut the bureaucracy within the Education Department, and Education Secretary Linda McMahon has furthered that agenda by reassigning programs and grants to other agencies instead of dissolving the department, which would require congressional approval.
The agency remained steadfastly behind the policy in its response to the lawsuit.
“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,” Kent said.
The lawsuit primarily includes states with Democratic leadership, but Vermont, Nevada, Kentucky and Pennsylvania have a Republican governor or attorney general.
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