A federal court in June 2026 blocked a new Education Department rule that would have restricted new student loan borrowing for certain professional degree programs. The rule, had it been enacted on July 1 as planned, would have imposed new annual and aggregate borrowing limits for professional students, which critics had argued would have dire impacts on several professions, particularly in the health care field.
“Today’s decision is an important step forward for physician associate students, educational programs, patients, and the healthcare workforce,” said the American Academy of Physician Associates (AAPA) and the Physician Associates Education Association (PA Education Association) in a joint statement following the ruling in June. “By granting preliminary relief, the Court recognized that the harm caused by this rule is too significant to ignore and that PA students should not be forced to suffer its consequences while the case is being decided. Allowing the rule to go into effect on July 1 while the legal challenges on the merits proceed would cause irreparable harm to PA students, programs, the profession and the public.”
Here’s what the ruling means for borrowers who need to take out student loans to pursue a professional degree.
How the new rule would have split graduate and professional degree borrowing limits
The Education Department’s new rule would have imposed limits on borrowing across various degree programs, but the main issue in dispute centered on the definition of a “graduate degree” program versus a “professional degree” program. In short, programs that the department defined as “graduate degree” programs would face harsher borrowing caps (meaning borrowers would have more limited access to federal student loans, both on an annual and an aggregate basis) compared to “professional degree” programs.
The department’s rule, which was set to go into effect on July 1, would have capped federal student loan borrowing for graduate degree programs at $20,500 annually and $100,000 in total. Meanwhile, borrowing for “professional” degree programs would be limited to $50,000 in federal student loans annually and $200,000 in total. This is a major distinction, but the department defined “professional degree” programs to encompass only a limited number of specific degrees.
Why health care groups pushed back
Critics argued that the Education Department unlawfully characterized certain degree programs as “graduate” degree programs rather than “professional” degree programs in an arbitrary manner not mandated by Congress, resulting in several professions being subject to more restricted federal student loan borrowing. Health care professional associations were particularly critical, arguing that the classification of certain nursing and physician associate programs would preclude many prospective students from enrolling in those programs, exacerbating existing health care provider shortages across the country. Several of these professional associations filed legal challenges against the department earlier in 2026 to block the new rule.
“The Department of Education ignored the voices of nurses and nurse allies who spoke out against this rule throughout their rulemaking process,” said Jennifer Mensik Kennedy, president of the American Nurses Association (ANA), one of the groups that had challenged the new professional degree classification, in a statement announcing one of the lawsuits. “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.”
Court rules the new loan caps are likely unlawful
In June 2026, a federal court agreed with the challengers and issued a nationwide injunction blocking the Education Department’s new definition of professional degree programs and the associated caps on federal student loan borrowing. The ruling was made before the new rule was set to take effect on July 1, 2026.
“Plaintiffs … have established that they are likely to succeed on their APA claim that the Rule’s definition of ‘professional degree’ is contrary to law, that they would suffer irreparable harm should the Rule go into effect, and that the balance of equities and the public interest are in their favor,” reads the decision issued by the U.S. District Court for the District of Columbia. “In short, plaintiffs are likely to establish that the Department’s interpretation of the illustrative list [of professional degrees] fails to adhere to the statutory text.”
“By applying a definition of ‘professional degree’ that is likely far narrower than Congress intended, the Rule subjects plaintiffs’ individual prospective student members to lower loan caps,” continued the court. “Some of these prospective students may be forced to forgo their educational and professional goals” as a result of the student loan limits.
“This decision reflects what healthcare leaders, educators, and advocates across the country have made clear: PAs are essential healthcare professionals who provide high-quality care in every medical setting and specialty,” said the AAPA and PA Education Association in their joint statement. “With 500 million patient interactions each year, PAs are on the front lines of care in hospitals, clinics, and communities across the country, and millions of Americans rely on them every day, particularly in rural and underserved areas.”
What the ruling means if you need loans for a professional degree
The court’s decision in June 2026 blocks the Education Department’s rule on student loan borrowing for professional degree programs, but is not a final ruling on the merits of the legal challenges. The department is, for now, prevented from imposing its new definition of “professional degree” programs on prospective students while the litigation continues.
In the meantime, the department updated its webpage that explains the new student loan limits to reflect the court’s ruling.
“On June 24, 2026, the U.S. District Court for the District of Columbia preliminarily stayed part of the U.S. Department of Education’s professional degree definition,” said the department in a banner update on the webpage. “This means that some of the programs that were identified as a professional degree program won’t be considered a professional degree program, while other programs that previously weren’t identified as a professional degree program will be considered a professional degree program for the duration of the stay. We encourage you to contact your institution to determine if this impacts you.”
Importantly, the preliminary injunction only blocks the Education Department’s updated definition of professional degree programs that had been set to go into effect on July 1. Changes in student loan borrowing limits for other degree programs (including graduate degree programs) and other changes to student loan repayment programs (such as the eventual phaseout of the Saving on a Valuable Education (SAVE), Income-Contingent Repayment (ICR) Plan and Pay As You Earn (PAYE) plans, and the launch of the new Repayment Assistance Plan (RAP) are unaffected by the ruling.