A federal judge in Washington, D.C., has temporarily halted the U.S. Education Department's revised definition of professional degrees, preserving higher federal loan limits for thousands of health-care graduate students. The ruling, issued late Wednesday by U.S. District Judge Beryl Howell, prevents the department from enforcing a more restrictive standard that would have placed nursing, physician assistant, physical therapy, public health, and teacher training programs under lower borrowing caps.
The court order leaves the new July 1 loan limits in place. Graduate students remain capped at $20,500 per year and $100,000 total, while those in professional degree programs can still borrow up to $50,000 annually and $200,000 overall. The Education Department had sought to limit professional status to just 11 fields, including law, medicine, dentistry, pharmacy, theology, and clinical psychology.
According to Education Department data cited in the final rule, during the 2023-2024 academic year, 429,320 graduate and professional borrowers received $12.34 billion in federal disbursements exceeding the new annual caps. Health-care borrowers accounted for 223,970 of those individuals and $7.87 billion, representing approximately 64% of the excess loan dollars.
Specific health-care programs saw significant borrowing above the new limits. Physician assistant master's programs had 19,580 borrowers taking out $812 million over the annual cap. Physical therapy doctoral and professional programs involved 19,310 borrowers and $633 million above the limit. Registered nurse master's programs had 11,140 borrowers with $241 million in excess loans.
The ruling has direct implications for private lenders, particularly SLM Corp (NASDAQ: SLM), which owns Sallie Mae. In a June filing with investors, SLM projected that the federal Grad PLUS loan cuts could boost its annual originations by $4.5 billion to $5 billion, representing a potential increase of up to 70% over several years. SLM's own projections indicated $7.4 billion in expected 2025 private loan originations. The court decision trims but does not eliminate this growth opportunity, as the caps remain in place but the professional degree exception continues.
Judge Howell did not block the overall borrowing caps or restore uncapped Grad PLUS loans. She noted that plaintiffs' primary grievance was with Congress's decision to end uncapped borrowing, not the department's definitional rule. The Education Department said it is reviewing the order and will take appropriate action, leaving open the possibility of an appeal.
Legal experts suggest the ruling may face challenges. Josie Eskow Skinner, partner at Sligo Law Group, told Inside Higher Ed that the statutory language covers more than the 11 professions designated by the department, but an appeal would not be surprising. Parties have until July 2 to propose next steps for the court.
Advocates for health-care education welcomed the decision. Skye Perryman, president of Democracy Forward and lawyer for the plaintiffs, said the ruling will help students entering nursing, public health, education, and marriage and family therapy. Dr. Deborah Trautman, head of the American Association of Colleges of Nursing, expressed encouragement and support for maintaining federal funding for nursing students in master's and doctoral programs.
The timing remains tight for schools and borrowers. The National Association of Student Financial Aid Administrators noted that while the ruling applies nationwide, significant uncertainty persists due to the lack of an appeal or guidance from the Education Department as of its June 25 update. With a July 2 deadline for court submissions, the situation could evolve rapidly.
