States sue Education Department over nursing loan cap exclusion

A federal loan rule that excludes nursing from the government’s definition of a professional degree could make advanced training harder to afford and deepen staffing gaps in hospitals, rural clinics and community care settings. On May 19, 25 states and Washington, D.C., sued the U.S. Department of Education in U.S. District Court in Maryland, arguing the change will choke off access to the higher borrowing limits many graduate nursing students need.

The dispute centers on the One Big Beautiful Bill Act, which sets graduate students at a $20,500 annual loan cap and $100,000 overall, while professional students can borrow up to $50,000 a year and $200,000 total. The Education Department finalized its rule on April 30 and set it to take effect July 1. Under the rule, only 11 programs qualify as professional degrees: pharmacy, dentistry, veterinary medicine, chiropractic, law, medicine, optometry, osteopathic medicine, podiatry, theology and clinical psychology.

Nursing was left out, along with physician assistant, physical therapy, occupational therapy, audiology and social work. The states say Congress used non-exclusive language when it described professional degrees, listing examples rather than drawing a closed circle of eligible programs. They argue the department turned that illustrative list into an exclusive one, narrowing a category Congress did not intend to limit so sharply.

Washington officials said the rule could hit the state hard. Washington Attorney General Nick Brown said it would make it harder for Washingtonians to pursue professional degrees and worsen shortages, a warning that lands in a state already dealing with persistent healthcare workforce problems. The state says the rule could affect hundreds of students, including more than 360 students in the University of Washington’s Doctor of Nursing Practice program and 75 Master of Nursing students.

The Education Department has defended the rule as a way to reduce debt and pressure graduate programs to control costs. It says 95 percent of nursing students already borrow below the annual limit and that undergraduate nursing programs are not affected. The department also says 80 percent of the nursing workforce does not have a graduate degree.

Nursing organizations and other healthcare groups have pushed back sharply, saying the exclusion could discourage students from entering fields that already struggle to recruit and retain workers. The lawsuit is part of a broader fight over how the Trump administration is carrying out student loan changes in the law, after a negotiated rulemaking process in 2025.