25 states, Washington sue Education Department over student loan restrictions

BALTIMORE (CN) — A coalition of 25 states and the District of Columbia sued the Department of Education on Tuesday in Maryland federal court over a sudden policy change that will restrict access to student loans for scholars pursuing professional degree programs.

Those restrictions, the coalition says, were unlawfully imposed and would significantly limit federal aid for those seeking entry into the healthcare workforce.

“We need more nurses, therapists and social workers, and our federal government should be supporting their studies, not defunding them,” said Connecticut attorney general William Tong in a news release. “The Trump/McMahon plan to magically drive down education costs by barring student loans defies Congress, defies the law, defies reality and will do real damage to Connecticut students and workers.”

In July 2025, Congress passed the One Big Beautiful Bill Act, establishing, among other things, differing federal student loan limits for “graduate” and “professional” programs.

Under the act, graduate students could borrow up to $20,500 annually, while professional students could borrow as much as $50,000 annually, beginning July 1, 2026.

To make the distinction between students, the act defines a “professional student” as a student enrolled in a program of study that awards a professional degree as then defined by the Education Department. That definition contained a non-exhaustive list of degrees including, but not limited to, medicine, pharmacy, dentistry, veterinary medicine, law and theology.

However, the Education Department’s definition would not last. On May 1, the department announced a new final rule, limiting its definition of “professional degree” to an exclusive set of degrees and adding a series of new eligibility requirements. Under those newly proposed restrictions — set to take effect on July 1 — students seeking degrees such as a master’s or doctorate in nursing would no longer qualify as professional students, and unable to obtain associated federal student loans.

By adding these limitations in direct contradiction to the definitions enshrined in the One Big Beautiful Bill Act,  the coalition argues, the department acted in excess of its authority in defiance of Congress, in violation of the Administrative Procedure Act.

“Congress spoke clearly,” the coalition wrote. “A professional degree must meet three criteria … that were in the regulation Congress expressly incorporated into [the Big Beautiful Bill]. Congress did not require anything more or less. But defendants’ rule unlawfully adds criteria to that straightforward statutory definition and limits professional degrees to the illustrative list, contrary to the statute’s plain terms.”

In a statement sent to Courthouse News, Secretary of Education Nicholas Kent defended his department’s rule change as legal while bashing the coalition, portraying the lawsuit’s leaders as Democrats interested in “buy[ing] votes” by calling for student loan forgiveness programs.

“Now the same people are fighting against the Trump administration’s legal efforts to drive down the cost of college,” 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.”

The lawsuit is being co-led by attorneys general for Colorado, Maryland, Nevada and New York; and joined by the attorneys general of Arizona, California, Connecticut, Delaware, District of Columbia, Hawaii, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, North Carolina, Oregon, Rhode Island, Vermont, Virginia, Washington and Wisconsin, as well as the governors of Kentucky and Pennsylvania.

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