A federal judge dealt another blow to the Trump administration’s plans to cap student-loan borrowing.
US District Judge Michael Simon ruled that the Department of Education exceeded its authority when it intended to restrict access to federal lending for certain professional degrees.
It’s the third ruling by a federal judge blocking the department’s plan from taking effect. The department had planned to implement a new rule on July 1 that would have limited professional degrees to 11 programs, including dentistry and medicine, while excluding others like nursing and social work.
Only these programs would qualify for a $200,000 lifetime borrowing cap, while other advanced programs would receive a $100,000 lifetime cap. The department’s proposed list of professional degrees sparked pushback from lawmakers and advocates, who said some programs excluded from the list required higher borrowing caps to ensure sufficient funding for students in those programs.
The ruling in Oregon last month related to the naturopathic medicine field. The plaintiffs, including colleges and students in naturopathy, said that the department’s decision to exclude the field from the professional degree list risked pushing students into private student loans, which often have higher interest rates and are ineligible for federal loan forgiveness programs.
Additionally, naturopathy associations said the caps could harm revenue should students choose not to enroll due to the borrowing caps.
Simon, the judge, said the harms posed by the caps to both students and schools are “imminent” because students are deciding whether they can afford to enroll in the program for the coming academic year. He placed a preliminary injunction on the department’s proposed definition of “professional” and ordered it to qualify naturopathic medicine for the higher borrowing limit.
The department wrote in a notice on Federal Student Aid that it encourages students to contact their school to see how the court ruling affects them.
At the end of June, a separate court decision blocked the department’s narrowed definition of a professional degree from taking effect. As a result of that ruling, the department released an updated list of 30 programs that would qualify for a higher borrowing limit as the litigation progresses. It said at the time that it’s confident the narrowed definition is “lawful and will continue to defend it.”
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