Twenty-five states filed a lawsuit against the Education Department on Tuesday over a new $100,000 cap on federal loans for graduate students.
The coalition of Democratic states claimed that the rule arbitrarily discriminated between “professional” students in education programs, such as medical or law school, and “graduate” students in other fields of study. The One Big Beautiful Bill Act set a $100,000 limit on graduate loans and a higher $200,000 cap on professional loans.
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“Cutting off access to federal student loans cuts off access to career opportunities for Virginians,” Virginia Attorney General Jay Jones said. “This unlawful rule will worsen the workforce crisis and further strain to the healthcare field. The Trump administration is once again skirting the system of checks and balances, and my office is committed to standing up for student borrowers in the Commonwealth.”
The lawsuit alleges that the Education Department’s rule, which marked only 11 programs as eligible for the professional designation, failed to follow Congress’s more flexible definition of which programs qualify as professional.
Federal law had defined a professional degree as one that signified a student had completed the academic requirements to begin practicing and was beyond a bachelor’s degree. However, the law also gave 10 illustrative examples of a professional program, which the Education Department used in its definition, while adding an additional program. The states suing the agency claim that the new professional definition was narrower than lawmakers had intended.
Sens. Jeff Merkley (D-OR) and Roger Wicker (R-MS) introduced a bill to include advanced nursing degrees as professional programs for the sake of federal loans, as they have been excluded from the Education Department’s current definition.
“It is imperative that Congress address the nursing shortage across the United States,” Wicker said. “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.”
Moreover, the states claim that the department did not exercise its legal authority to account for other variables, such as a program’s operating costs.
The Education Department has defended the loan cap as necessary to lower ballooning tuition costs in higher education.
“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,” Undersecretary of Education Nicholas Kent told the Washington Examiner.
“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 continued.
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The department also pointed to certain graduate programs cutting their tuition. The University of California, Irvine, cut the costs of two of its business degrees to be closer to the $100,000 limit. The University of Santa Clara Law School also issued a $16,000 scholarship for each incoming first-year student.
Meanwhile, the Education Department has claimed that other graduate programs are predatory on students, incentivizing them to take out large federal loans they are unlikely to afford. New York University offers a master’s degree in film and video studies, where students take on $168,000 in debt on average but only earn $47,000 four years after graduation.
