Nursing Group Files New Lawsuit Over Student Loan Borrowing Restrictions

A coalition of major professional nursing associations filed a legal challenge against the Education Department last week over new regulations that would impose strict limits on federal student loan borrowing for nursing students. The new rules, which are set to go into effect on July 1, 2026, would classify advanced nursing degree programs as “graduate degree” programs rather than “professional degree” programs and, therefore, would be subject to lower caps on borrowing.

“The Department of Education ignored the voices of nurses and nurse allies who spoke out against this rule throughout their rulemaking process. Increasing barriers to post-baccalaureate nursing education doesn't just limit opportunities and access to education, it limits patients' access to timely care from trusted, highly trained practitioners,” said Jennifer Mensik Kennedy, president of the American Nurses Association (ANA), one of the plaintiff organizations, in a statement last week. “We are exercising our due process rights to ensure this is corrected.”

The ANA is joined by the American Association of Nurse Anesthesiology (AANA), the Association of Women's Health, Obstetric and Neonatal Nurses (AWHONN), the American College of Nurse Midwives (ACNM), the American Holistic Nurses Association (AHNA), the Association of Pediatric Hematology/Oncology Nurses (APHON), Chi Eta Phi Sorority, Incorporated, the Health Ministries Association (HMA), the National Association of Clinical Nurse Specialists (NACNS), and the National Association of Nurse Practitioners in Women's Health (NPWH). The lawsuit follows a separate legal challenge filed by a coalition of two dozen states last month, which are also challenging the updated student loan limits imposed under the new regulations.

Here’s what the latest lawsuit means, and what student loan borrowers and prospective nursing students should know.

Why ‘graduate' vs. ‘professional' degree status changes your limits

The core issue in dispute is the Education Department’s classification under the new rules of “graduate degree” programs and “professional degree” programs. Programs that fall under the “graduate degree” umbrella will be subject to lower borrowing caps than those under the “professional degree” umbrella.

“The annual and aggregate [federal student loan borrowing] limits vary depending on your program of study and, for undergraduate students, how far along you are in your program and whether you’re a dependent or an independent student,” explains the Education Department in new online guidance summarizing the new federal student loan borrowing limits.

Under the new federal loan cap rules set to go into effect July 2026, federal student loans for graduate degree programs will be capped annually at $20,500 with an aggregate cap of $100,000. Federal student loans for programs classified as “professional” degrees will be capped annually at $50,000, with an aggregate cap of $200,000.

How the Education Department defines a professional degree

“For the purposes of loan limits, Congress required the Department to use a narrow and limited definition to determine which postbaccalaureate programs would be eligible for higher loan limits for ‘professional students,’” said the department in a fact sheet accompanying the release of the finalized regulations earlier this year. “Building on the statutory definition contained in the Act, the Department arrived at the definition contained within the final rule, which achieved consensus among the all stakeholders represented during negotiated rulemaking.

“The definition includes a list of 11 core program fields: pharmacy (Pharm.D.), dentistry (D.D.S. or D.M.D.), veterinary medicine (D.V.M.), chiropractic (D.C. or D.C.M.), law (L.L.B. or J.D.), medicine (M.D.), optometry (O.D.), osteopathic medicine (D.O.), podiatry (D.P.M., D.P., or Pod.D.), theology (M.Div., or M.H.L.), and clinical psychology (Psy.D. or Ph.D.),” continued the department. “Nearly all of these fields have long been classified as professional degrees under the Department’s existing regulations, and no program has lost its professional degree classification under the final rule.”

The Education Department has also created a test to determine whether a program can be considered a “professional degree” program. To fall within that term’s definition, the degree must signify “both completion of the academic requirements for beginning practice in a given profession, and a level of professional skill beyond that normally required for a bachelor's degree;” it must generally be “at the doctoral level;” and should require “at least six academic years of postsecondary education coursework for completion, including at least two years of postbaccalaureate level coursework” while generally requiring “professional licensure to begin practice.”

Nursing groups challenge lower student loan limits

But the nursing organizations that filed the latest legal challenge against the Education Department argued that the classification of nursing programs as “graduate” rather than “professional” degree programs is unlawful.

“Advanced nurses have pursued education beyond their bachelor’s degrees, obtaining advanced degrees that include the Master of Science in Nursing (MSN), the Doctor of Nursing Practice (DNP), the Doctor of Nursing Anesthesia Practice (DNAP), and the Doctor of Philosophy in Nursing (PhD),” reads the organization’s complaint. “Advanced nursing degrees, like many professional degrees, are a significant financial commitment — a typical advanced nursing degree can exceed $38,000 per year and total in-state tuition and fees for a DNP in nurse anesthesia can cost more than $100,000,” which exceeds the program caps available for graduate degree programs under the new regulations starting on July 1, 2026.

Noting that the department excluded advanced nursing degrees from the category of “professional” degree programs, the nursing groups argued that the basis for the exclusion “appears nowhere in the statute” that Congress passed last year to change federal student loan borrowing limits.

“To the extent that the Final Rule’s definition of ‘professional student’ excludes advanced nursing students, it contradicts the OBBBA’s statutory definition and violates the Administrative Procedure Act (APA),” said the nursing organizations in their formal complaint. “The Final Rule is also arbitrary and capricious and not the product of reasoned decision-making. The Department relied on factors that Congress did not intend for it to consider, engaged in inconsistent and unsupported reasoning, and failed meaningfully to engage with public comments.”

What lower caps could mean for patient care

The nursing groups argued that the lower borrowing caps imposed on advanced nursing degree programs will worsen existing care shortages, as prospective nursing students are forced to turn to expensive private student loans (which don’t qualify for federal relief programs like income-driven repayment or Public Service Loan Forgiveness) or abandon their advanced degree aspirations altogether.

“The AANA is deeply concerned by the Department of Education’s decision to limit federal student loan access for advanced practice nursing degrees,” said Jeff Molter, president of the AANA, in a statement last week. “This policy will constrict the anesthesia workforce pipeline at a time when patient demand is growing nationwide, ultimately reducing access to essential procedures like surgery, childbirth, and cancer screenings — especially in rural and underserved communities where Certified Registered Nurse Anesthetists (CRNAs) are often the primary anesthesia providers.”

What prospective borrowers should know about new limits for nursing programs

The new limits on federal student loan borrowing are set to go into effect on July 1, 2026. Most students entering advanced nursing degree programs on or after that date will be impacted by the new borrowing limits, barring any ruling from a court in response to the recent legal challenges. However, the rules do allow for a limited exception for current students who are already enrolled in a degree program.

“Students who are enrolled in health profession programs and who previously were eligible for higher annual and aggregate [federal student loan] limits can continue to receive loans at those higher limits while they remain eligible for the exception,” says Education Department web guidance. “However, once the exception is canceled, those students will become subject to the new borrowing limits.”