Two federal judges on June 30, 2026, blocked the Trump administration from implementing restrictive new rules for student loan borrowing and public service forgiveness. The rulings, issued in Massachusetts and Washington D.C., stop the Department of Education from narrowing eligibility for loan forgiveness and limiting federal borrowing caps for various healthcare graduate programs.
Federal Courts Block PSLF Eligibility Restrictions
Photo: The Guardian
U.S. District Judge Myong J. Joun in Massachusetts struck down revised eligibility requirements for the Public Service Loan Forgiveness (PSLF) program on Tuesday. According to The Washington Post, the ruling came just one day before the new rules were scheduled to take effect. The PSLF program, established by Congress in 2007, cancels education debt for government and nonprofit employees after 10 years of service and 120 monthly payments.
The administration attempted to redefine “public service” to exclude organizations with a “substantial illegal purpose.” As reported by The Guardian, the Department of Education defined this phrase to include activities such as aiding illegal immigration, supporting terrorism, or providing gender-affirming care for transgender minors.
The challenge was brought by a coalition of nonprofits, cities, and Democratic-led states. They argued the rule was a tool to target causes the administration disfavors, including immigration rights and transgender healthcare. The plaintiffs claimed the agency lacked a rational basis for the policy and that the original law did not grant the department discretion to create such exceptions.
“one big beautiful bill act,”
The move follows a March 2025 executive order in which Donald Trump claimed the program had misdirected tax dollars into activist organizations that harm national security and American values.
The Battle Over “Professional Degree” Loan Caps
Photo: CNBC
In a separate ruling in Washington D.C., Judge Beryl A. Howell froze the Department of Education’s narrow definition of a “professional degree.” This definition is central to the “one big beautiful bill act,” a GOP tax-and-spending law signed by President Trump.
Under the act, federal borrowing limits are split into two tiers. According to CNBC, the limits are as follows:
Student Category
Annual Cap
Aggregate Limit
Professional Students
$50,000
$200,000
Other Graduate Students
$20,500
$100,000
The controversy centered on who qualifies as a “professional.” The Trump administration initially identified only 11 degrees—including theology, dentistry, and medicine—that fit the label. This narrow scope would have forced students in other graduate programs to adhere to the $20,500 annual cap.
The impact was expected to be gendered. A report by EdTrust found that women account for more than 70% of graduates in programs that the administration had excluded from the higher borrowing limits.
Impact on Healthcare Workforce and Access
Federal court strikes down PSLF rule that would have blocked certain employers
The court’s stay forced the Education Department to publish an expanded list of over 20 professional degrees eligible for the $50,000 annual cap. This updated list now includes registered nursing, speech-language pathology, and physician associates.
For students like Benjamin Pinckney, a graduate of Lehman College aspiring to be a physician assistant, these limits represent a significant financial hurdle. According to CBS News, students facing the lower caps may be forced to turn to private lenders, who typically charge higher interest rates and offer fewer repayment options.
“This preliminary ruling is an important step for nurse practitioner students, the future healthcare workforce and the patients who depend on NPs for access to high-quality care,”
Valerie Fuller, President of the American Association of Nurse Practitioners, via CNBC
The financial gap is stark when compared to actual educational costs. While professional students can borrow up to $50,000 annually, the median cost of a public medical school is nearly $300,000 over four years, and private medical school costs often exceed $400,000.
Financial Risks and Future Guidance
Despite the court’s intervention on the definition of professional degrees, the overall loan caps established by the “big beautiful bill act” remain in place. Students are no longer able to borrow up to the full cost of attendance as they once could.
Experts warn that these limits could deter minorities and low-income students from pursuing graduate degrees, potentially worsening primary care and rural healthcare shortages. Todd Pickard, president of the American Academy of Physician Associates, likened the policy’s approach to cutting off an entire arm to treat a hangnail.
Because the administration may appeal the decision or attempt to further modify the list of qualifying degrees, financial advisors are urging caution.
“I encourage folks to stay connected with their financial aid offices and wait for additional guidance from them,”
Kathleen Boyd, Certified Financial Planner and founder of Student Loan Savvy, via CNBC
For now, students in the expanded list of professional programs are advised “not to assume their program is limited to the lower borrowing cap just yet” as the legal battle over the Department of Education’s regulatory authority continues.
Rachel specializes in American politics, public policy, and domestic affairs. She spent a decade reporting from Washington, D.C., before transitioning into editorial management. She leads the U.S. news desk, shaping coverage that explains political developments and national events with clarity and context.
