By Nate Raymond
June 25 (Reuters) - A federal judge has blocked the Trump administration from implementing a new rule that would impose lower federal student loan limits for people pursuing graduate degrees in nursing and other healthcare-related fields.
U.S. District Judge Beryl Howell in Washington, D.C., late on Wednesday sided with eight trade organizations including the American Association of Nurse Practitioners and the PA Education Association who sought to block the rule from taking effect
on July 1.
The Education Department did not respond to a request for comment. The Education Department has defended the caps as necessary to encourage universities to control costs.
The groups sued after the department published the rule on May 1 in order to implement new federal student loan caps the Republican-led Congress adopted in July 2025 when it passed President Donald Trump's tax and spending bill known as the One Big Beautiful Bill Act.
That law scaled back a federal loan program for students pursuing graduate degrees, eliminating one type of loan that allowed students to borrow up to the full cost of attendance and imposing new caps on another type of loan.
Under those new limits, borrowing for students enrolled in professional degree programs, such as law schools and medical schools, is capped at $50,000 per year and $200,000 total while students pursuing other graduate degrees are limited to $20,500 per year and up to $100,000 overall.
The Education Department's rule altered an earlier regulatory definition of what constitutes a "professional degree" to cover only certain degrees in 11 fields, including law, medicine, dentistry and theology.
But Howell, who was appointed by Democratic President Barack Obama, said that when Congress enacted the 2025 law, it expressly adopted a longstanding regulatory definition for those degrees that the department had been using since 2007.
"By adopting the preexisting definition as it was in effect on a specific date, Congress removed any discretionary authority the Department may have had to narrow the definition for the purpose of determining federal loan caps," she wrote.
The judge said as a result, the rule ran afoul of the Administrative Procedure Act and had to be set aside before it could take effect.
But she declined to go even further by preventing the new loan caps from being enforced until a new rule is issued, saying she could not remedy the plaintiffs' "primary frustration" over the decision by Congress to eliminate uncapped borrowing.
(Reporting by Nate Raymond in Boston; Editing by Chizu Nomiyama )
