Coalition challenges unlawful rule that could restrict access to advanced education and worsen workforce shortages
Attorney General Dan Rayfield and a coalition of attorneys general are challenging the U.S. Department of Education (ED) over a new rule that unlawfully limits access to federal student loans for students pursuing professional degree programs, including many healthcare and other critical workforce fields. In a lawsuit filed today, the coalition pushed back on a recently finalized ED rule that narrows the federal definition of “professional degree” and imposes restrictions Congress did not authorize.
“This is yet another example of this administration building an economy that simply does not work for people,” said Attorney General Rayfield. “Oregon is already short on nurses, therapists, and other critical healthcare workers – and this rule makes that problem worse. The last thing we should be doing is making it harder and more expensive for people to get the advanced training that fills those gaps.”
In July 2025, Congress passed legislation imposing new limits on federal student loans for graduate and professional students. The new limits are lower for graduate students than for professional degree students; to distinguish the two, Congress incorporated an existing federal definition of “professional degree” into law. The lawsuit alleges that the Department of Education unlawfully altered that definition by adding new requirements and narrowing eligibility in ways Congress never authorized.
The coalition argues the rule could harm states by reducing support for public institutions of higher education, creating barriers for students pursuing advanced training, and worsening workforce shortages in critical professions. The complaint notes that these impacts could be particularly significant in fields such as healthcare, where states already face ongoing workforce challenges. Oregon’s public universities offer degree programs that would be negatively impacted by this rule, including graduate programs in nursing, occupational therapy, physical therapy, and social work. Students hoping to pursue a degree in these fields would have access to fewer federal student loans, putting the programs out of reach of many students.
The lawsuit also challenges provisions that limit protections for students already enrolled in programs. The statute includes a grandfathering provision that delays implementation of the loan caps for currently enrolled students. Under the rule, however, some students who transfer institutions or temporarily withdraw and later return to their programs could lose eligibility for grandfathering, creating additional financial barriers.
The coalition filed the lawsuit in the U.S. District Court for the District of Maryland.
Joining Attorney General Rayfield in this lawsuit are the attorneys general of Arizona, California, Colorado, Connecticut, Delaware, the District of Columbia, Hawai‘i, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New Mexico, Nevada, New York, North Carolina, Rhode Island, Vermont, Virginia, Washington and Wisconsin, as well as the governors of Kentucky and Pennsylvania.