New York Attorney General Letitia James announced on May 19 that she is co-leading a coalition of 24 states and the District of Columbia in filing a lawsuit against the Trump administration over new restrictions on federal student loans for students pursuing careers in key health care fields. The legal action follows a recent rule by the U.S. Department of Education that limits which degree programs qualify for higher federal student loan amounts, making it more difficult for those studying nursing, social work, physical therapy, occupational therapy, physician assistant studies, and similar professions to finance their education.
The issue is significant because these changes could worsen existing shortages in the health care workforce and reduce access to medical services in New York and across the country. The coalition is asking the court to block this rule and restore broader access to federal student loans for future health professionals.
“You should not have to be wealthy to serve your community as a nurse, physical therapist, or physician assistant,” said Attorney General Letitia James. “Higher education is expensive, and our health care system is already under immense strain. This rule will shut talented people out of critical professions and leave communities with fewer health care providers they desperately need. We cannot afford fewer nurses, fewer providers, or fewer opportunities for working people to enter these essential fields.”
Congress had previously set higher federal loan caps—$100,000 total for graduate programs and $200,000 for professional degree programs—using an established definition that included degrees leading directly into licensed professions. However, according to Attorney General James’s office, the Department of Education’s final rule issued in May 2026 narrows this definition beyond what Congress intended. As a result of this change—even though some excluded programs meet Congress’s criteria—students will only be able to borrow up to $20,500 per year if enrolled in affected fields.
James said that many students may now have no choice but to rely on private loans with less favorable terms or face increased debt burdens; some may delay graduation or abandon their career plans altogether. The coalition also argues that public colleges could lose important tuition revenue while patients—especially those in rural or underserved areas—could see reduced access due to workforce shortages.
Additionally, the attorneys general are challenging provisions affecting students who were supposed to be protected from these new limits if they enrolled before changes took effect but later transferred schools or temporarily withdrew before returning; they argue these restrictions are not supported by law.
The lawsuit claims violations under the Administrative Procedure Act because it says the rule contradicts federal law and was enacted arbitrarily. Alongside New York’s attorney general are officials from Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland,
Massachusetts,
Michigan,
Minnesota,
Nevada,
New Jersey,
New Mexico,
North Carolina,
Rhode Island,
Oregon,
Vermont,
Virginia,
Washington,
and Wisconsin—as well as governors from Kentucky and Pennsylvania.
Letitia James heads the New York Attorney General’s office which promotes social justice through civil rights enforcement and consumer advocacy; protects public safety; upholds civil rights; defends consumer protections; preserves environmental interests; operates regional offices across New York State addressing local legal issues;
and provides services such as fraud investigations and tenant dispute mediation,according to the official website.
