U.S. court blocks Education Department grad loan cap rule before July 1 start

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Court blocks grad loan cap rule

Highlights

U.S. District Judge Beryl Howell has temporarily blocked the Education Department's new 'professional degree' loan eligibility rule set for July 1 implementation.
The court order allows continued $20,500 annual borrowing for most graduate students and delays expanded $50,000 cap for 11 professional degrees, including medicine and dentistry.
The ruling does not stop the broader graduate loan caps, maintaining risk for students in excluded fields such as nursing, education, and public health.

Court order delays key loan eligibility rule

As reported by CNBC, U.S. District Judge Beryl Howell in Washington, D.C., temporarily freezes part of the U.S. Department of Education's new student loan limits that are due to take effect on July 1. The order blocks, for now, the department's definition of a "professional degree," a category that the Trump administration uses to decide which graduate students can borrow more under the new regime.

Under the regulations, most graduate students are subject to a $20,500 annual borrowing cap, while students classified as pursuing professional degrees can borrow up to $50,000 a year. The administration identifies 11 degrees under that label, including medicine, dentistry and theology, under the One Big Beautiful Bill Act.

The lawsuit comes from plaintiffs including the American Association of Nurse Practitioners, which argues the rule "arbitrarily and capriciously" defines a professional degree. The challengers say the approach carries "profound consequences" for fields left outside the category, including nursing and education.

Skye Perryman, president and CEO of Democracy Forward, the group representing the plaintiffs, says borrowers seeking degrees in nursing, public health, education, and marriage and family therapy will be able to continue relying on the Direct Loan Program to serve their communities.

Limits remain a broader risk for graduate financing

Howell does not go as far as blocking the government from enforcing the broader graduate loan caps. She says the court cannot remedy the plaintiffs' "primary frustration" over the end of uncapped borrowing.

That means the ruling narrows one element of the policy rather than stopping the entire lending overhaul. For universities and students in excluded professional tracks, the case still carries significant implications because access to federal financing remains tied to how the government classifies graduate programs.

Our earlier coverage of Judge Beryl Howell’s injunction explained that the court temporarily blocked the Education Department’s narrower definition of “professional” programs tied to higher graduate borrowing caps. We noted that the pause keeps larger borrowing limits available for advanced nursing and other healthcare-related programs while the legal challenge proceeds, even as broader loan-cap changes remain on track.

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