Salem, Oregon – Oregon Attorney General Dan Rayfield has joined a multistate legal fight against the U.S. Department of Education, challenging a newly finalized rule that the coalition says would make it harder for students in professional degree programs to access federal student loans.
The lawsuit, filed in the U.S. District Court for the District of Maryland, argues that the Department of Education unlawfully narrowed the federal definition of “professional degree” and added restrictions that Congress did not approve. The rule affects students pursuing advanced training in fields that include healthcare and other critical workforce areas.
“This is yet another example of this administration building an economy that simply does not work for people,” said Attorney General Rayfield. “Oregon is already short on nurses, therapists, and other critical healthcare workers – and this rule makes that problem worse. The last thing we should be doing is making it harder and more expensive for people to get the advanced training that fills those gaps.”
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The dispute stems from legislation Congress passed in July 2025 that set new limits on federal student loans for graduate and professional students. Those caps are lower for graduate students than for students in professional degree programs. To separate the two categories, Congress used an existing federal definition of “professional degree.”
According to the coalition, the Department of Education went beyond that law by changing how the definition is applied. The lawsuit claims the agency created new hurdles and reduced eligibility in ways that could block students from receiving the higher loan support intended for professional programs.
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Rayfield’s office said the effects could be felt sharply in Oregon, where public universities offer programs that may be harmed by the rule. Those include graduate programs in nursing, occupational therapy, physical therapy and social work. Students entering those fields could face smaller federal loan options, making programs more difficult or impossible to afford.
The coalition also says the rule could weaken public higher education and worsen shortages in essential professions, especially in healthcare. At a time when states are already trying to recruit and train more workers, the attorneys general argue the policy would push students in the opposite direction.
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The lawsuit also challenges limits tied to students who are already enrolled. Congress included a grandfathering provision meant to delay the new loan caps for current students. But under the Department of Education’s rule, some students who transfer schools or temporarily withdraw and later return could lose that protection.
Joining Rayfield are attorneys general from Arizona, California, Colorado, Connecticut, Delaware, the District of Columbia, Hawai‘i, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New Mexico, Nevada, New York, North Carolina, Rhode Island, Vermont, Virginia, Washington and Wisconsin, along with the governors of Kentucky and Pennsylvania.
