The suit contends the rule is arbitrary and capricious because it narrows the statutory definition of "professional degree" programs. The Department of Education has acknowledged that several excluded programs meet Congress’ definition but refused to classify them as such under the new rule.
Under the May 2026 rule, students in programs such as nursing, social work, physical therapy, occupational therapy, physician assistant studies, speech-language pathology, audiology, and athletic training are limited to $20,500 per year in federal student loans.
The coalition argues this contradicts a federal law enacted last year that set higher loan caps for professional degree programs. Under that law, loans were capped at $100,000 total for graduate programs and $200,000 for professional degree programs.
Attorney General James said the rule will force many students to rely on more expensive private loans, take on unsustainable debt, delay completing their education, or abandon these programs altogether.
"You should not have to be wealthy to serve your community as a nurse, physical therapist, or physician assistant," James said. "Higher education is expensive, and our health care system is already under immense strain. This rule will shut talented people out of critical professions and leave communities with fewer health care providers they desperately need. We cannot afford fewer nurses, fewer providers, or fewer opportunities for working people to enter these essential fields."
The coalition warns the rule will reduce the number of graduates entering critical health care fields, worsen workforce shortages, and make it harder for patients, especially those in rural and underserved communities, to access care. Public colleges and universities also stand to lose critical tuition revenue as a result of the rule, the coalition said.
The suit also challenges the administration's decision to strip grandfather protections from students who transfer schools or temporarily withdraw and later re-enroll, even if they continue pursuing the same course of study.
Joining Attorney General James in filing the lawsuit are the attorneys general of Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, North Carolina, Rhode Island, Oregon, Vermont, Virginia, Washington, Wisconsin, and the District of Columbia, as well as the governors of Kentucky and Pennsylvania.