ATTORNEY GENERAL RAOUL CHALLENGES UNLAWFUL U.S. DEPARTMENT OF EDUCATION RULE LIMITING ACCESS TO STUDENT LOANS FOR PROFESSIONAL DEGREE PROGRAMS

ATTORNEY GENERAL RAOUL CHALLENGES UNLAWFUL U.S. DEPARTMENT OF EDUCATION RULE LIMITING ACCESS TO STUDENT LOANS FOR PROFESSIONAL DEGREE PROGRAMS

May 19, 2026

Chicago - Attorney General Kwame Raoul, as part of a coalition of states, filed a lawsuit against the U.S. Department of Education over a new rule that unlawfully limits access to federal student loans for students pursuing professional degrees, including in healthcare and other critical workforce fields.

"This rule will cut off access for many qualified students and will worsen nationwide labor shortages in vital fields, including nursing and physical therapy. Students interested in pursuing degrees in these critical professions will have to turn to higher-interest borrowing and risky loans, jeopardizing their future economic security," Raoul said. "I join my fellow attorneys general in challenging this unlawful rule, and I remain committed to advocating for student borrowers in Illinois and across the country."

In July 2025, Congress passed a new law limiting how much students can borrow in federal student loans for graduate and professional degree programs. The new law allows students to borrow less in federal student loans for graduate programs than they are allowed to borrow for professional degree programs. Congress explained the difference between graduate and professional degree programs by adopting a definition of "professional degree" and giving 10 illustrative examples, such as medical and law degrees. Congress made clear that these were only examples and not a complete list of all professional degrees to which the higher federal student loan cap applies.

The coalition's lawsuit, filed in the U.S. District Court for the District of Maryland, challenges a recently finalized rule that unlawfully narrows the definition of "professional degree" by adding new requirements and limiting eligibility in ways Congress never authorized. Raoul and the attorneys general argue that the rule excludes degree programs that qualify under the standards established by federal law. Many students seeking to enter professional programs that exceed the annual cap will be forced to seek private loans on worse terms or be priced out of higher education entirely.

The coalition asserts the rule will 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 attorneys general argue that preventing students from borrowing the amounts needed to pay for programs such as nursing, physician assistant and physical therapy will result in a reduced supply of expert healthcare workers at a time when Illinois and other states are facing shortages.

The lawsuit also challenges provisions that limit protections for students already enrolled in some degree programs. The federal legislation included a provision that delays implementation of the loan caps for currently enrolled students. However, under the Department of Education's new rule, students who transfer institutions or temporarily withdraw and later return to their programs could lose eligibility to be waived out of the new rule, creating additional financial barriers.

Joining Attorney General Raoul in filing the lawsuit are the attorneys general of Arizona, California, Colorado, Connecticut, Delaware, the District of Columbia, Hawaii, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New Mexico, New York, Nevada, North Carolina, Oregon, Rhode Island, Vermont, Virginia, Washington and Wisconsin, as well as the governors of Kentucky and Pennsylvania.