Washington DC: A federal judge has delivered a significant legal setback to the Trump administration, blocking it from implementing a new rule that would impose lower federal student loan limits for people pursuing graduate degrees in nursing and other healthcare-related fields.
U.S. District Judge Beryl Howell of the District of Columbia issued the ruling on June 24, siding with eight professional organizations, including the American Association of Nurse Practitioners and the PA Education Association, which had challenged the rule before its planned July 1 implementation date.
Background: The “One Big Beautiful Bill”
The groups sued after the Department of Education published the rule on May 1 to implement new federal student loan caps that the Republican-led Congress adopted in July 2025, when it passed President Trump’s tax and spending legislation known as the One Big Beautiful Bill Act.
That law scaled back a federal loan program for students pursuing graduate degrees, eliminating one type of loan that allowed students to borrow up to the full cost of attendance and imposing new caps on another type. Under those new limits, borrowing for students enrolled in professional degree programs, such as law schools and medical schools, is capped at $50,000 per year and $200,000 total, while students pursuing other graduate degrees are limited to $20,500 per year and up to $100,000 overall.
The Education Department then went further, narrowing the regulatory definition of which degrees qualify as “professional.” The department’s rule altered an earlier regulatory definition of what constitutes a “professional degree” to cover only certain degrees in 11 fields, including law, medicine, dentistry, and theology. This move would have subjected nursing, public health, and other health-related graduate programs to the stricter, lower loan caps.
The Ruling
Judge Howell found that the department had overstepped its legal authority. She wrote that when Congress enacted the 2025 law, it expressly adopted a longstanding regulatory definition for professional degrees that the department had been using since 2007, thereby removing any discretionary authority the department may have had to narrow that definition for the purpose of determining federal loan caps. As a result, she ruled the new rule violated the Administrative Procedure Act and had to be set aside before taking effect.
However, the ruling was not a complete victory for the plaintiffs. Howell declined to go even further by preventing the new loan caps from being enforced until a new rule is issued, saying she could not remedy the plaintiffs’ “primary frustration” over Congress’s decision to eliminate uncapped borrowing.
Reaction
Skye Perryman, whose liberal legal group Democracy Forward represented the plaintiffs, said the ruling would benefit students pursuing careers in nursing, public health, education, and marriage and family therapy, calling these “key services that the federal government should be supporting by welcoming those who wish to enter them, not creating barriers to vital support.”
The Education Department said it was “reviewing the order and will take appropriate action,” according to Ellen Keast, the agency’s press secretary for higher education. The department had previously defended the loan caps as necessary to encourage universities to control rising tuition costs.
What Happens Next
The ruling prevents the restricted definition of “professional degree” from taking effect, meaning more graduate students in healthcare and related fields will retain access to higher borrowing limits, at least for now. The administration may appeal or issue a revised rule. The broader loan caps introduced by the One Big Beautiful Bill Act remain in force, leaving the longer-term landscape of graduate student borrowing significantly changed from what it was before July 2025.
Source: Reuters