POLITICS

States Sue Education Department Over New Loan Limits

PUBLISHED May 19, 2026, 4:13 PM ET

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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.

By Lauren Mitchell | JQJO News

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.

News Intelligence

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.

Media Bias

Articles Published:: 8
Right Leaning:: 0
Left Leaning:: 2
Neutral:: 6

Who Benefited

Students pursuing professional degrees and state governments challenging the rule stand to benefit if courts block the Department of Education's narrowed definition, preserving broader loan eligibility and funding access for affected programs.

Who Impacted

Students in graduate and professional programs—especially in nursing and allied health—could suffer reduced borrowing capacity and disrupted training if the Department of Education's rule limiting loan eligibility takes effect.

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