A coalition of 25 states and the District of Columbia filed a lawsuit against the Trump administration between May 19 and 21, 2026, challenging new federal student loan borrowing limits set to take effect July 1 [1, 2]. The lawsuit targets legislation that imposes a $100,000 lifetime loan cap for graduate students and a $200,000 cap for professional degree programs including medical, dental, and law schools [1, 2].
The states argue the caps will exacerbate shortages of healthcare workers by limiting access to advanced nursing and other health profession degrees. New York Attorney General Letitia James said, "You should not have to be wealthy to serve your community as a nurse, physical therapist, or physician assistant. 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" [1, 2].
The Department of Education, which finalized the loan caps on April 30, defends the rules as necessary to control soaring tuition costs. Under Secretary of Education Nicholas Kent said, "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" [1]. He added that critics are prioritizing institutional profits over students' ability to afford education [2].
One point of contention is the classification of advanced nursing degrees. The Department of Education excludes these from the $200,000 professional degree loan cap category, while other sources note nursing is affected but without specifying this exclusion [1, 2].
The lawsuit argues that the narrow definition of professional degrees and the firm loan limits will disproportionately impact health professions and worsen existing workforce shortages [1, 2]. The new borrowing limits are scheduled to be enforced starting July 1, 2026 [2].
