Attorney General Bonta Sues Trump Administration Over Attempt to Limit Student Loan Access for Healthcare Workers

OAKLAND — California Attorney General Rob Bonta today, as part of a coalition of 24 attorneys general and the governors of Kentucky and Pennsylvania, filed a lawsuit challenging the U.S. Department of Education’s final rule that narrows the federal definition of a “professional degree” and would dramatically reduce the availability of federal student loans for some categories of professional students. The lawsuit, filed in the U.S. District Court for the District of Maryland, argues that the Trump Administration’s new definition will exclude students seeking graduate degrees in nursing, physician assistant studies, physical therapy, and other professions from eligibility for higher student loan borrowing limits. This change will make it harder for these vital healthcare workers to pursue advanced degrees, threatening the availability of a critical workforce as well as the operations of healthcare systems in California and across the country.

“Across the nation, healthcare systems are underwater, with doctors, nurses, and other health professionals stretched to meet the needs of their communities. Nurses, physician assistants, and other health professionals are absolutely vital to keep our healthcare system running,” said Attorney General Bonta. “Now, the Trump Administration is threatening to make this crisis even worse by limiting students' access to the  federal student loans that make it possible to pursue the professional degrees needed for critical specialized work. This is not only illegal — it further strains an already strained system and threatens to reduce Californians’ access to medical care. We’ll see the President in court.” 

BACKGROUND 

For decades, the federal student loan program has expanded access to graduate and professional degrees without regard to discipline. By enabling more students to obtain post-baccalaureate degrees, the federal government has helped create a skilled workforce of well-paid professionals.

In July 2025, Congress passed the One Big Beautiful Bill Act, which, in part, establishes annual and aggregate borrowing limits for federal student loans. It distinguishes between “graduate students” and “professional students” for the purposes of establishing the annual and aggregate loan limits. Prior to enactment of the One Big Beautiful Bill Act, students could borrow up to the full cost of attendance of a graduate program, regardless of whether it was considered a “graduate” or “professional” program. Under the statute, graduate students now have a $20,500 annual and $100,000 aggregate cap for borrowing, while “professional” students have a $50,000 annual and $200,000 aggregate cap.

Health professionals with advanced training through master’s or doctoral programs play critical roles in the U.S. healthcare system. The advanced training they receive allows them to fulfill specialized, vital roles in the healthcare process. Advance practice nurses with professional degrees, for example, provide essential, high-quality care to their patients, and they often do it in underserved, rural communities. Nurses, physician assistants, and other graduate health professionals can fill healthcare gaps by, among many other things, seeing patients, prescribing medication, and manning helplines. They are essential in fields that attract too few doctors because of relatively low pay, like family medicine, as well as in subspecialties that require years of specific training. The change in definition will discourage potential healthcare workers from entering the field, at a critical time when more dedicated professionals in these roles are needed. 

The new rule will also discourage students from seeking graduate degrees by making such degrees inaccessible or more expensive and may push students toward often-predatory private student loans. The rule is also expected to threaten states’ ability to meet critical workforce needs and exacerbate the shortage of health professionals in teaching positions, which will affect universities’ capacity to train the next generation of providers.

THE LAWSUIT

In the complaint today, the attorneys general challenge the restrictive definition of “professional degree,” which the coalition argues is contrary to law, in excess of statutory authority, and arbitrary and capricious in violation of the Administrative Procedure Act. The coalition also challenges the arbitrary and capricious implementation of the One Big Beautiful Bill Act’s grandfathering provision, which would disadvantage students who transfer schools or withdraw and then re-enroll. The Act provided that currently enrolled students who borrowed federal student loans as of June 30, 2026, are “grandfathered” into the preexisting loan limits. But the final rule excludes students who transfer institutions or withdraw and re-enroll from grandfathering. 

In filing the lawsuit today, Attorney General Bonta joins the attorneys general of Colorado, Maryland, Nevada, New York, Arizona, Connecticut, Delaware, the District of Columbia, Hawai‘i, Illinois, Maine, Massachusetts, Michigan, Minnesota, New Jersey, New Mexico, North Carolina, Oregon, Rhode Island, Vermont, Virginia, Washington and Wisconsin, as well as the governors of Kentucky and Pennsylvania.