Key facts
- A federal judge blocked the Trump administration's new rule on federal student loan limits for graduate students.
- The rule would have lowered loan limits for students pursuing degrees in nursing and other healthcare-related fields.
- The lawsuit was filed by eight trade organizations, including the American Association of Nurse Practitioners.
- U.S. District Judge Beryl Howell ruled the Education Department overstepped its authority by changing a regulatory definition of 'professional degree'.
- The judge stated Congress had expressly adopted a preexisting definition of these degrees when enacting a law in July 2025.
A federal judge has blocked the Trump administration's new rule that would have imposed lower federal student loan limits for students pursuing graduate degrees in nursing and other healthcare-related fields. U.S. District Judge Beryl Howell in Washington, D.C., ruled late Wednesday that the Education Department exceeded its authority by altering a regulatory definition of 'professional degree' that Congress had expressly adopted when passing a tax and spending bill in July 2025.
The lawsuit was filed by eight trade organizations, including the American Association of Nurse Practitioners and the PA Education Association, who sought to prevent the rule from taking effect on July 1. The department had defended the caps as necessary to encourage universities to control costs.
The law scaled back a federal loan program for graduate students, eliminating one type of loan that allowed borrowing up to the full cost of attendance and imposing new caps on another. Under the new limits, borrowing for students in professional degree programs like law and medicine is capped at $50,000 annually and $200,000 total, while students pursuing other graduate degrees are limited to $20,500 per year and $100,000 overall.
Judge Howell stated that by adopting the preexisting definition of professional degrees as it was in effect on a specific date, Congress removed any discretionary authority the department may have had to narrow the definition for determining federal loan caps. The judge found the rule violated the Administrative Procedure Act and had to be set aside. However, she declined to prevent the new loan caps from being enforced until a new rule is issued, stating she could not remedy the plaintiffs' primary frustration over Congress's decision to eliminate uncapped borrowing.