A coalition of 24 Democratic-led states and the District of Columbia has filed a lawsuit against the Trump administration to block new federal student loan limits, arguing the measures will worsen the nation's nursing shortage. The rules, set to take effect on 1 July, cap borrowing for graduate students in fields such as nursing at $20,500 per year, with a total limit of $100,000.
The Trump administration contends the caps will curb rising tuition costs, which have more than tripled since 2000. However, critics say the policy fails to address tuition inflation and will deter people from entering healthcare professions, particularly in rural areas already struggling to recruit providers. 'Capping federal loans without capping tuition is like putting less gas in the tank of a car and still wanting to go the same distance,' said Jennifer Zhang of Protect Borrowers.
The caps, part of the One Big Beautiful Bill Act, also limit loans for 'professional' degrees like medicine and law to $50,000 per year. Opponents warn that students will turn to private loans with interest rates up to 18%, compared to 7.9% for federal loans. 'This rule will shut talented people out of critical professions and leave communities with fewer healthcare providers they desperately need,' said New York Attorney General Letitia James.
Supporters of the caps, including the American Enterprise Institute, argue that reducing loan availability could force universities to lower costs. However, evidence for this is mixed, and critics note that concurrent cuts to Medicaid and nutrition assistance may lead states to reduce higher education funding, further increasing tuition. A study in Health Affairs Scholar found that over a quarter of advanced practice nurses with loans had balances exceeding the $100,000 cap.
