WASHINGTON, D.C. — Two lawsuits were filed on May 19 challenging the U.S. Education Department’s new regulations that limit postbaccalaureate student loan eligibility, with plaintiffs arguing the agency exceeded its statutory authority. The regulations, scheduled to take effect July 1, restrict federal borrowing for graduate and professional students under provisions of Congress’s One Big Beautiful Bill Act.
One lawsuit was filed in Washington, D.C., by attorneys general from 25 states and the District of Columbia. The other was filed by a coalition of professional associations, including the American Association of Nurse Practitioners. Both suits contest the department’s interpretation of the law, which caps most graduate students at $20,500 per year or $100,000 total in federal loans, while allowing up to $200,000 only for students in 11 specific professional degree programs.
The Education Department’s regulation defines eligible programs as Pharmacy, Dentistry, Veterinary medicine, Chiropractic, Law, Medicine, Optometry, Osteopathic medicine, Podiatry, Theology, and Clinical psychology. Plaintiffs argue the department improperly treated a nonexhaustive list in the Higher Education Act as exhaustive. The attorneys general’s complaint states, “The final rule narrows the definition incorporated into [the One Big Beautiful Bill Act] and effectively makes [an] illustrative list of degrees exclusive. Congress never intended anything of the sort.” Lynn Eisenberg, attorney representing the associations, said, “The Department’s decision to substantially narrow the programs subject to higher loan caps puts entrance to essential nursing, healthcare, therapy, and education professions out of reach for thousands of would-be students and undermines the professional programs themselves.” She added, “We are proud to support this broad coalition of associations standing up for their members and for the future of these important professions.”
The lawsuits also challenge the department’s use of four-digit CIP codes to restrict eligible fields, arguing that using broader two-digit codes would have included other high-demand health-care professions like nursing. The professional associations’ complaint further alleges the department violated the Master Calendar requirement due to the short window between finalizing the rule and its July 1 effective date.
Legal experts have weighed in on the challenges. Tres Cleveland, partner at Thompson Coburn LLP and co-chair of the firm’s higher education practice group, said, “I have been wrong many times in [predicting] what courts will do, and I’m sure I’ll be wrong in the future, but I would be surprised if there was not some type of injunction that would limit this rule coming into effect.” Emily Merolli, founding partner at Sligo Law Group, said, “The Education Department created a mess where there didn’t need to be one.” She added, “I’m really grateful that I’m not a financial aid administrator, because this is incredibly stressful for them, as it just creates an insane amount of chaos and expense for universities as they’re trying to figure out how to navigate this.”