Summary
A federal judge in Washington, D.C. has blocked a Department of Education rule that would have limited federal student loan access for graduate students in nursing and certain other health-related fields. The court’s decision prevents the department’s narrower regulatory definition of "professional degree" from taking effect on July 1, but it did not enjoin enforcement of the loan caps Congress put in place in 2025.
Background and ruling
U.S. District Judge Beryl Howell issued the order late on Wednesday, siding with eight trade organizations that challenged the Education Department’s May 1 rulemaking. The plaintiffs included the American Association of Nurse Practitioners and the PA Education Association. They had sought to stop the regulation from taking effect on July 1.
The department did not provide a response to a request for comment. In prior statements, the Education Department maintained the new limits were aimed at encouraging universities to control costs.
Statutory changes and the department’s rule
The rule was published after Congress, in July 2025, enacted changes to a federal loan program for graduate students as part of President Donald Trump’s tax and spending measure dubbed the One Big Beautiful Bill Act. That law eliminated one loan type that allowed students to borrow up to the full cost of attendance and imposed caps on another loan type.
Under the limits established in the statute, students in professional degree programs such as law and medical schools face caps of $50,000 per year and $200,000 in aggregate, while students in other graduate programs are limited to $20,500 per year and $100,000 in total. The Education Department’s May 1 rule narrowed a prior regulatory definition of what counts as a "professional degree" so that only specified degrees in 11 fields, including law, medicine, dentistry and theology, would qualify.
Court’s legal reasoning
Howell, who was appointed by President Barack Obama, found that when Congress enacted the 2025 changes it expressly adopted a longstanding regulatory definition that the department had been applying since 2007. She wrote: "By adopting the preexisting definition as it was in effect on a specific date, Congress removed any discretionary authority the Department may have had to narrow the definition for the purpose of determining federal loan caps."
The judge concluded the department’s narrowing of the definition violated the Administrative Procedure Act and therefore the rule had to be set aside before it could take effect.
Scope of the injunction and remaining issues
Although the judge set aside the regulation, she declined to issue a broader injunction that would bar enforcement of the new statutory loan caps while a new rulemaking proceeds. Howell said she could not provide the plaintiffs with relief for their "primary frustration" regarding Congress’s decision to eliminate uncapped borrowing.
Key points
- The court blocked the Education Department’s May 1 rule that narrowed the regulatory definition of "professional degree," preventing it from taking effect on July 1.
- Congress’s July 2025 statute, part of the One Big Beautiful Bill Act, adopted the preexisting definition in effect on a specific date, limiting the department’s discretion to change that definition.
- Sectors affected include higher education institutions, health-care graduate programs, and student loan markets, where the new caps and the definition of eligible degrees determine borrowing access and institutional fiscal decisions.
Risks and uncertainties
- Legal uncertainty remains because the judge set aside the rule but did not block enforcement of the statutory loan caps; institutions and students face ambiguity about future borrowing limits.
- The Education Department’s ability to issue a replacement regulation is constrained by the court’s interpretation that Congress adopted the preexisting definition, creating potential procedural and timing risks for any new rulemaking.
- Stakeholders remain frustrated by the underlying congressional decision to eliminate uncapped borrowing, but the court stated it could not remedy that policy choice, leaving unresolved policy risk for graduate students and programs.
Conclusion
The ruling nullifies the department’s attempt to narrow which graduate degrees qualify as "professional" for the purpose of the 2025 statutory loan caps, but it stops short of altering the caps themselves. Parties challenging the rule succeeded in preventing that specific regulation from taking effect, while the broader statutory changes adopted by Congress continue to govern borrowing limits unless further judicial or legislative action occurs.