WASHINGTON — Two dozen Democratic-led states and the District of Columbia filed a federal lawsuit Tuesday targeting new restrictions on federal student loan borrowing, claiming the limitations will damage healthcare education and training programs.
The legal challenge argues that the Trump administration’s borrowing caps will create particular hardships for students in critical medical fields, potentially worsening healthcare shortages in communities nationwide.
“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 stated in writing. “We cannot afford fewer nurses, fewer providers, or fewer opportunities for working people to enter these essential fields.”
Federal education officials pushed back against the criticism, maintaining that the new borrowing limits are already encouraging higher education institutions to reduce their tuition costs.
“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 responded in a written statement.
The controversial restrictions stem from the One Big Beautiful Bill Act that Congress approved in 2025, establishing maximum borrowing amounts of $100,000 for graduate-level programs and $200,000 for professional degree programs.
Under previous regulations, graduate students could borrow federal funds up to their program’s total cost. The new borrowing restrictions will begin in July.
Federal education officials classify professional degrees as including pharmacy, dentistry, veterinary medicine, chiropractic, law, medicine, optometry, osteopathic medicine, podiatry and theology programs.
However, numerous other healthcare disciplines including nursing, physical therapy, dental hygiene, social work and occupational therapy were left out of this classification. Additional licensed fields such as accounting and education also received no special designation.
The policy modifications have generated significant opposition from healthcare education advocates, who warn that underserved communities will bear the greatest impact from reduced medical provider training.
“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 stated when the final regulations were approved last month.
