Lawsuit over federal student loan caps highlights impact on nursing shortage

A coalition of 25 states and the District of Columbia sued the Trump administration this week over the new limits on federal student loans. For students pursuing careers in healthcare fields, such as nursing, social work, physical therapy and occupational therapy, the lawsuit comes at a critical time, experts say.

Starting this year, the legislation established in President Donald Trump’s One Big Beautiful Bill Act caps the amount of federal loans students can borrow for graduate school at $100,000 over a lifetime — and sets a lifetime loan limit of $200,000 for professional programs, such as medical, dental or law school, according to rules finalized by the U.S. Department of Education at the end of April. 

“Higher education is expensive, and our health care system is already under immense strain,” New York Attorney General Letitia James said in a statement on Tuesday announcing the lawsuit. “This rule will shut talented people out of critical professions and leave communities with fewer health care providers they desperately need.”

The Education Department has said the new loan limits will provide a much-needed check on soaring tuition costs, which have jumped significantly in recent decades, outpacing inflation and other household expenses. Higher costs have made college and graduate school seem out of reach for some, while saddling others with crippling student loan debt.

“After decades of unchecked student loan borrowing that gave schools no reason to control costs, these commonsense loan caps — created by Congress — are already incentivizing colleges and universities to lower tuition,” Undersecretary of Education Nicholas Kent told CNBC in an email.

“Clearly, these Democratic governors and attorneys general are more concerned about institutions’ bottom-line rather than American students and families’ ability to access affordable postsecondary education,” Kent said.

A nursing shortage

For students pursuing careers in nursing and other high-need fields, “the path forward is increasingly uncertain, with consequences not just for individual borrowers but for the workforce pipelines these communities depend on,” said Megan Walter, a senior policy analyst at the National Association of Student Financial Aid Administrators, a financial aid organization.

The American Nurses Association, a professional advocacy group, said the new rules could result in fewer registered nurses nationwide, just as demand for healthcare professionals is soaring. Aging baby boomers are causing a massive long-term demographic shift and driving up the need for health services — and workers, research shows.

Over the next decade, the demand for registered nurses is projected to grow faster than the number of full-time workers, according to a December brief from the federal government’s National Center for Health Workforce Analysis. By 2038, there is a projected 3% shortage, assuming that attrition, graduation and labor force participation remain the same.

“This rule, if implemented, will have a direct and devastating impact on healthcare across our country,” Jennifer Mensik Kennedy, president of the American Nurses Association, said in a statement.