POLITICS

States Sue Education Department Over New Loan Limits

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Washington — A coalition of Democratic attorneys general and governors filed a lawsuit Tuesday against the U.S. Department of Education, alleging the agency unlawfully narrowed the federal definition of "professional degree" and thereby limited access to federal student loans for many graduate and professional students, including nursing and allied health programs, following congressional changes in July 2025. Legal filings cite Department regulations published May 1 and point to the elimination of the Grad PLUS program and new caps that set graduate annual limits at $20,500 and a $100,000 aggregate cap; most changes are scheduled to take effect July 1, and courts will now review the states' claim that the agency exceeded its statutory authority.

Prepared by Lauren Mitchell and reviewed by editorial team.

Timeline of Events

July 2025 — Congress passed legislation setting new student loan parameters for graduate and professional students.
1st May 2025 — Department of Education published finalized regulations implementing the overhaul.
Early June 2025 — A coalition of Democratic attorneys general and governors filed suit in federal court.
1st July 2025 — Most of the student loan rule changes are scheduled to take effect.
Mid-2025 onward — Courts will adjudicate whether the Department lawfully interpreted 'professional degree' definitions.

Why This Matters to You

If you're a graduate or professional student, these changes could impact your ability to secure federal loans. Especially if you're in nursing or allied health programs. Keep a close eye on this lawsuit's progress.

The Bottom Line

The Department of Education's new loan limits could make graduate education less accessible for many. If you're considering such programs, start exploring other funding options. Worth forwarding if you know someone planning to further their studies.