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 caps, arguing the restrictions will worsen the nation's nursing shortage. The rules, set to take effect on 1 July, limit borrowing for graduate students in fields such as nursing, physical therapy and nurse anaesthesia to $20,500 per year, with a $100,000 lifetime cap.
The Trump administration argues the caps will lower tuition costs by reducing the availability of federal loans, which it says have enabled universities to raise fees unchecked. However, critics contend the policy 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, a consumer advocacy group.
According to a study in Health Affairs Scholar, over a quarter of advanced practice nurses who took out loans had balances exceeding the $100,000 limit. Opponents warn that students may turn to private loans with interest rates up to 18%, compared to 7.9% for federal graduate loans. New York Attorney General Letitia James, a plaintiff in the case, stated: 'This rule will shut talented people out of critical professions and leave communities with fewer healthcare providers they desperately need.'
Supporters of the caps, such as Beth Akers of the American Enterprise Institute, argue that reducing credit availability could force institutions to cut costs. However, Akers acknowledged there is no evidence yet that such limits will lower tuition. Meanwhile, Zhang predicted that state budget shortfalls from federal cuts to Medicaid and food assistance could lead to higher tuition at public universities, further burdening students.
