Democratic-led states sue to block student loan caps by Trump administration | US student finance

While the Trump administration has argued that new restrictions on the size of federal student loans will lower tuition costs, public health officials and Democrats say the measures will worsen the nation’s severe nursing shortage.

Therefore, a Democratic-led group of 24 states and the District of Columbia A lawsuit was recently filed The federal government is trying to block the new rule, which will go into effect July 1.

If it happens, opponents say, it would not only reduce tuition but also reduce the number of people seeking careers in medicine, which would especially hurt rural areas that already have difficulty finding health care providers.

“Capping federal loans without capping tuition is like putting less gas in a car’s tank and still wanting to get the same mileage,” said Jennifer Zhang, a policy, research and data analyst at Protecting Borrowers, a consumer advocacy group.

new parametersThe legislation, which Congress passed as part of the One Big Beautiful Bill Act, would limit people with so-called “professional” master’s degrees, such as medicine, dentistry and law, to $50,000 a year in debt, with a maximum of $200,000. Other graduate students, including those who want to become nurses, physical therapists, and nurse anesthetists, will be capped at $20,500 annually and $100,000 total.

The Trump administration claims the restrictions would prevent graduate schools from constantly increasing tuition and make education more affordable. The average cost of earning a master’s degree has more than tripled since 2000, according to a 2024 report. Georgetown University.

“For the past two decades, graduate students have been able to borrow up to the full cost of their tuition, allowing colleges and universities to raise tuition and fees with few restrictions while placing the financial burden on students.” The US Department of Education stated.

This cost can also lead to a significant amount of debt. More than a quarter of advanced practice nurses, such as nurse practitioners and nurse anesthetists, who received loans had balances that exceeded the $100,000 limit, according to one study. last work In the journal Health Affairs Scholar.

“It seems very reasonable to think that if institutions increase costs and expenses in proportion to credit availability, they can reduce costs as those limits come down,” said Beth Akers, a senior fellow at the right-wing American Enterprise Institute, which supports the new limits.

While some researchers attribute the rising cost of higher education to the increasing availability of financial aid for students, called the Bennett hypothesis, the evidence for this is mixed, according to a 2022 study. Federal Reserve report.

Akers acknowledges that there is no evidence that the new caps will lower tuition costs. This, he said, is because “policy-wise we have never gone in that direction. We have always moved in the direction of expansion.”

Zhang argues that the Big Beautiful One Bill would actually lead to tuition increases. States have been at odds since the Trump administration cut funding for Medicaid and the Supplemental Nutrition Assistance Program. budget deficits. In such cases, higher education financing often cut first.

“Students at public institutions will likely see their tuition fees and attendance costs increase,” Zhang said.

Students will also need to rely more on private loans, Zhang and others say. While the interest rate on federal student loans for graduate students is 7.9%, private loans can have an interest rate of almost 18%. Education Data Initiative.

Critics argue that such rising costs could discourage people from pursuing careers such as nursing.

“This rule will drive talented people away from critical professions and leave communities without the number of health care providers they desperately need,” said New York State Attorney General Letitia James, one of the plaintiffs in the case. Press release. “We can’t afford fewer nurses, fewer providers, or fewer opportunities for working people to get into these essential areas.”

This may be particularly difficult in rural areas if fewer people decide to study nursing. While there is a nursing shortage in the United States, it is especially acute outside of cities. According to the report, there were approximately 98 registered nurses per 10,000 people in urban areas in 2022. Medical Care magazine; In rural areas, there were only 64 nurses per 10,000 people.

For example, Nebraska, a largely rural state, faces a shortage of approximately 6,700 nurses; This corresponds to 21% of demand. Nebraska Nursing Center Reported in 2025.

“The decision to move in this direction demonstrates a lack of understanding of the impact primary care providers have on the workforce,” said Lepaine Sharp-McHenry, dean of the College of Nursing at the University of Nebraska Medical Center.

Coby Rodriguez wants to become a certified registered nurse anesthetist because he met some of them during his undergraduate studies and witnessed their work while his mother had surgery for stage four pancreatic cancer.

“I believe they hold a very special position in health care,” said Rodriguez, who will soon graduate from Johns Hopkins University with a master’s degree in nursing. “They are the first to notice adverse events. They are the first to notify healthcare providers if family members have any questions.”

She hoped to practice rural medicine in her home state of Washington and planned to start school to become a nurse anesthetist after working as an intensive care unit nurse for a year. But because of the new credit limits, Rodriguez now expects to work for three to four years first.

She currently has nearly $70,000 in student loan debt, and the additional degree is expected to cost her at least $100,000. Rodriguez, whose mother died in 2021, wants to avoid taking out a private loan because she is not a co-signer, meaning she could be exposed to higher interest rates.

Credit lines have already caused some of her classmates to reconsider becoming an anesthesiologist or nurse practitioner, Rodriguez said.

“Interest rates on private loans and getting more money in general may not be worth it for some of those wages,” he said.

Despite the new potential financial hurdle, enrollment in the University of Nebraska nursing school’s graduate program is scheduled to increase 19% in fall 2026 over fall 2025, Sharp-McHenry said. He attributes this growth to an “aggressive marketing campaign” that highlights “the value of graduate education, especially in our current healthcare environment.”

Sharp-McHenry said school officials are also in contact with private financial institutions to offer “very attractive” loans to potential students: “This will allow them to continue progressing toward their educational goals and not be overly concerned about finances.”