Coalition of 24 states sues over professional degree loan limits set to impact healthcare
A coalition of 24 states, along with Washington D.C., filed a lawsuit this week, challenging the U.S. Department of Education’s new, lower caps on federal student loans that limit what borrowers can access, particularly if they’re seeking a Master’s degree.
The change directly impacts healthcare, with many students pursuing careers in dentistry, veterinary medicine, pharmacy and other fields subject to the new limits placed on “professional degrees." However, the Department of Education provided certain exemptions in other cases, such as physicians, which plaintiffs argue was done arbitrarily and did not take into account the impact discouraging certain specialties from pursuing advanced education would have on the American healthcare system.
Officially, the states are arguing that the decision of the federal government to apply these new limits—at the behest of President Donald Trump—is a violation of the Administrative Procedure Act (APA), as federal loan programs are established and funded by Congress.
“The Department of Education arbitrarily relied on several factors Congress did not intend it to consider—such as whether professionals are subject to supervision and the ‘historical context’ of the Department’s regulation—and its application of those factors is inconsistent and contradictory. The Department also failed to explain its rejection of an alternative definition during the negotiated rulemaking,” the lawsuit reads.
The new limits on graduate loans were part of the One Big Beautiful Bill Act, which was signed into law by Trump in summer 2025. No new limits were placed on undergraduate borrowing officially, but new caps were put on advanced degrees, which includes how much was borrowed for a bachelor’s degree.
The new total limit stands at $100,000 for a master’s degree, and $200,000 for a professional degree.
Maryland, New York leading the charge
Two states are listed first as the primary plaintiffs: Maryland and New York. In a statement, the latter said the new policy will “worsen the existing health care workforce shortage and make it harder for communities in New York and nationwide to access care.”
Speaking for all the plaintiffs, New York said the “coalition is asking the court to block the rule and restore access to the federal student loans these students are entitled to receive.”
Plaintiffs argue the cost of higher education is ultimately the problem, and that it’s wrong to punish people who can’t afford the price tag from pursuing advanced degrees.
“You should not have to be wealthy to serve your community as a nurse, physical therapist, or physician assistant,” New York Attorney General Letitia James said. “Higher education is expensive, and our health care system is already under immense strain. This rule will shut talented people out of critical professions and leave communities with fewer health care providers they desperately need.”
“We cannot afford fewer nurses, fewer providers, or fewer opportunities for working people to enter these essential fields,” she added.
The lawsuit, newly filed in a U.S. District Court of Maryland, has yet to be reviewed by a judge.
This is a developing story.
Chad is an award-winning writer and editor with over 15 years of experience working in media. He has a decade-long professional background in healthcare, working as a writer and in public relations.