A coalition of Democratic-controlled states sued the Trump administration’s Education Department Tuesday over new caps on graduate student loans imposed in the GOP’s tax-and-spending law.
The suit filed in the US District Court for the District of Maryland argues the department’s restrictive definition of “professional” degrees for the purposes of loan limits goes against what Congress intended. The 2025 law created two categories of degree programs with different caps: “Professional” students will receive greater loan allowances than “graduate” students.
Only 11 degree programs—excluding many health-related fields—are deemed “professional” and therefore qualify for higher loan amounts under the department’s final regulations.
“Congress never intended anything of the sort,” the complaint reads, arguing the administration’s final rule violates the Administration Procedure Act.
The regulations have drawn bipartisan pushback since they were finalized late last month. Democrats and Republicans have raised concerns directly with Education Secretary Linda McMahon about the impact of restricting loan access for a slew of sectors seeing nationwide workforce shortages, including healthcare and K-12 education.
Health professionals, teachers, social workers, and accounting professionals urged the department to expand its list of “professional” degrees.
Two trade groups for physician assistant education and professionals now plan to challenge the regulations, alleging overreach by the department and violation of the APA.
Students in “graduate” programs can borrow up to $20,500 annually, with a total of $100,000. Students in “professional” programs can borrow up to $50,000 a year and $200,000 total.
Degree programs with higher loan allowances include: medicine, pharmacy, podiatry, chiropractic, clinical psychology, optometry, osteopathic medicine, and dentistry. Those left out of the “professional” category include nursing, physician assistant, occupational therapy, physical therapy, education, and social work.
Department officials argue that the limits will pressure higher education institutions to lower their tuition costs and tackle a student loan crisis. Limitless subsidies from the federal government in the form of federal loans are to blame, the administration argues.
The case is State of Maryland v. US Department of Education, Md. Dist. Ct., No. 1:26-cv-01957, 5/19/26