States Challenge Loan Rule That Affects Nursing Education

Twenty-five states and the District of Columbia have launched a federal lawsuit challenging a narrow Education Department rule that reassigns many graduate programs out of the "professional" category for federal loan purposes. The plaintiffs, led by a mix of governors and state attorneys general, argue this technical reclassification will reduce the amount students can borrow for programs such as nursing, physician assistant studies and others that train clinicians at the graduate level, thereby constraining the pipeline of advanced practitioners and educators.

The federal loan framework created by recent legislation and implemented through Education Department rulemaking distinguishes "professional" students—eligible for higher limits—from other graduate borrowers. Under this structure professional students can borrow up to $50,000 a year and $200,000 in total, while other graduate students face $20,500 a year and $100,000 in total beginning July 1, 2026. The department has also proposed ending the Grad PLUS program, which would further change how graduate students finance their studies. The department has said 95% of nursing students borrow below the yearly loan limits and would not be affected, while states and nursing organizations counter that the policy will nevertheless reduce access to advanced training for many.

"Our state needs nurses and other healthcare workers, but this unlawful rule will make it much more difficult for Washingtonians to pursue professional degrees," said Washington Attorney General Nick Brown. The lawsuit asks a court to pause implementation while the legal challenge proceeds; if the rule remains in effect, schools may change admissions, and students could face higher out-of-pocket costs or shorter training pipelines that affect care delivery.