Judge blocks student loan caps, preserving higher borrowing for graduate students

U.S. District Judge Beryl Howell kept higher federal loan limits in place for graduate students in nursing, physical therapy, public health and other fields, blocking Education Department caps that would have cut most borrowing to $20,500 a year. The order preserved $50,000 in annual borrowing for students the department classifies as pursuing professional degrees.

The Education Department had planned to start the new limits on July 1, 2026, under loan changes tied to the One Big Beautiful Bill Act, also called the Working Families Tax Cuts Act. Under the department’s final rule, most graduate students would have been limited to $100,000 total, while students in professional-degree programs could borrow up to $50,000 a year and $200,000 overall. The department also said the law would end Grad PLUS loans for new borrowers and shift graduate lending into a system of annual and aggregate caps.

Howell temporarily blocked part of that rule on June 25, preventing the lower caps from taking effect as scheduled while litigation continues. The ruling gave students in nursing and several other fields temporary access to the higher borrowing limits, and the Education Department issued a revised rule on June 29 to comply with the court order.

Nursing groups have pressed the issue for months, arguing that graduate nursing should count as a professional degree because programs such as nurse practitioner, doctor of nursing practice and certified registered nurse anesthetist training can require borrowing beyond the proposed cap. The American Nurses Association and other nursing organizations filed suit on May 29, while a separate coalition of 24 attorneys general and two governors also challenged the rule in May.

The department says 95% of nursing students already borrow below the annual limit, and it argues the caps are meant to reduce overborrowing and push schools to lower tuition.