A coalition of states sued the U.S. Department of Education over a new regulatory definition that limits federal access to loans for students in graduate nursing and other healthcare fields. The dispute centers on which programs qualify as “professional degrees,” which determine higher federal borrowing caps under new loan limits taking effect July 1. States including Maryland, New York, Colorado, Nevada, and others argue the department’s approach goes beyond statutory authority and could reduce enrollment in critical healthcare programs, worsening workforce shortages. They also warn it could pressure public colleges’ revenue if students turn to more expensive private loans or exit the pipeline. Education officials defended the rule by citing examples of institutions lowering tuition in response to loan caps. The case introduces immediate uncertainty for graduate nursing and allied health pathways and adds pressure on institutions to model revenue and enrollment under revised federal borrowing rules.