On May 19, a coalition of 23 state attorneys general, the District of Columbia, and the governors of Kentucky and Pennsylvania filed a complaint in the U.S. District Court for the District of Maryland challenging a final rule issued by the U.S. Department of Education (ED) that, among other things, narrows the definition of “professional degree,” used for purposes of federal student loan borrowing limits, far beyond the statutory language. As previously covered by InfoBytes, on April 30, ED finalized the rule, effective July 1, implementing provisions of the One Big Beautiful Bill Act, which, in relevant part, establishes different loan caps for students enrolled in “graduate” and “professional” programs. The plaintiffs alleged that the final rule unlawfully adds criteria beyond the three-part statutory definition Congress adopted from 34 C.F.R. § 668.2, which requires only that a professional degree: (i) signify completion of academic requirements for beginning practice in a profession; (ii) signify a level of professional skill beyond a bachelor’s degree; and (iii) generally require professional licensure.

The complaint alleges ED’s rule effectively makes the statute’s “illustrative” list of professional degrees “exclusive,” excluding programs in nursing, physical therapy, and other health care fields that the plaintiffs contend meet the statutory criteria. The coalition also challenged ED’s interpretation of the statute’s grandfathering provision, which exempts currently enrolled students from the new loan limits; the rule strips those protections from students who transfer institutions or withdraw and re-enroll, even if they continue the same program of study. The complaint seeks declaratory and injunctive relief vacating the challenged portions of the rule, raising several APA claims: (i) that the professional degree definition is contrary to law and in excess of statutory authority; (ii) that the rule is arbitrary and capricious; and (iii) that the grandfathering restrictions are contrary to law, in excess of statutory authority, and arbitrary and capricious.