Judge says Trump’s student-loan borrowing cap for advanced degrees would cause immediate harm

A federal judge has delivered another setback to the Trump administration’s effort to cap student-loan borrowing.

US District Judge Michael Simon said the Department of Education went beyond its authority when it sought to restrict federal lending for certain professional degrees.

This is the third federal ruling preventing the department’s plan from taking effect. The agency had intended to roll out a new rule that would have limited professional degrees to 11 programs, including dentistry and medicine, while excluding others such as nursing and social work.

Under the proposal, only those programs would have qualified for a $200,000 lifetime borrowing cap, while other advanced programs would have faced a $100,000 cap. The department’s list drew criticism from lawmakers and advocates, who argued that some excluded programs needed higher borrowing limits to adequately fund students.

A prior ruling in Oregon concerned naturopathic medicine. Plaintiffs, including colleges and students in that field, argued that leaving naturopathic medicine off the professional-degree list would force students toward private loans, which often carry higher interest rates and are not eligible for federal forgiveness programs.

Naturopathy groups also said the limits could reduce revenue if fewer students enrolled because of the borrowing caps.

Simon said the harm to students and schools was immediate because students are now deciding whether they can afford to enroll for the coming academic year. He issued a preliminary injunction against the department’s proposed definition of “professional” and directed that naturopathic medicine be eligible for the higher borrowing limit.

The department said in a Federal Student Aid notice that students should contact their schools to understand how the ruling affects them.

Another court decision blocked the department’s narrower definition of a professional degree from taking effect. Following that ruling, the department released an updated list of 30 programs that would qualify for the higher borrowing limit while the lawsuits continue. At the time, it said it remained confident that the narrower definition was lawful and would keep defending it.