Democratic-led states challenge the Trump administration’s new caps on federal student loans

WASHINGTON (AP) — A coalition of Democratic-led states is challenging the Trump administration’s recent caps on federal student loans, arguing the limits will make it harder for students pursuing certain healthcare degrees to attain the necessary training and education.

In a lawsuit filed Tuesday, plaintiffs representing 24 states and the District of Columbia argued the Trump administration’s rules would disproportionately impact critical healthcare sectors.

“This rule will shut talented people out of critical professions and leave communities with fewer healthcare providers they desperately need,” New York Attorney General Letitia James said in a written statement. “We cannot afford fewer nurses, fewer providers, or fewer opportunities for working people to enter these essential fields.”

The Education Department defended the loan caps on student loans, saying they were already incentivizing colleges and universities to lower tuition.

“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,” Under Secretary of Education Nicholas Kent said in a written statement.

In 2025, Congress passed the One Big Beautiful Bill Act, which enacted new federal student loan caps. Programs that were designated as “graduate” programs faced a loan cap of $100,000, while professional degrees were capped at $200,000.

Previously, graduate students could take out loans up to the cost of their degree. The new loan caps take effect in July.

The Education Department’s definition of professional degrees include pharmacy, dentistry, veterinary medicine, chiropractic, law, medicine, optometry, osteopathic medicine, podiatry and theology.

But other healthcare fields, such as nursing, physical therapy, dental hygiene, social work and occupational therapy, were not included in the definition. Other fields that require certification and licensure, such as accounting and education, were also excluded.

The changes sparked anger and frustration across excluded healthcare sectors. Advocates said the effects would be felt by communities most in need of medical providers.

“This rule will be felt in real communities, for example, in rural areas where nurse practitioners, midwives, and nurse anesthesiologists are often the only providers of core care services,” American Nurses Association president Jennifer Mensick Kennedy said in a statement when the final rule passed last month.

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