Judge blocks Education Department rule restricting some graduate programs from higher loan limits

July 11, 2026 - 23:56

A federal judge has temporarily blocked a new Education Department rule that would have restricted federal borrowing limits for certain graduate programs, a decision that keeps higher loan caps in place for students in many healthcare fields while a legal challenge moves forward. The ruling, issued late last week, halts a policy that GW officials had warned would slash the amount graduate students could borrow through federal Direct PLUS Loans, potentially forcing thousands to seek private financing or abandon their studies.

The blocked rule targeted programs that the department deemed too expensive relative to graduates' expected earnings, including many master's degrees in the arts, humanities, and social sciences. Under the policy, students in those programs would have been limited to smaller federal loans, with the government arguing it was protecting taxpayers from defaults. But critics, including several universities and student advocacy groups, said the rule unfairly penalized students pursuing lower-paying but essential careers, such as teaching, social work, and public health.

The judge's order preserves the current loan limits, which allow graduate students to borrow up to the full cost of attendance, for the duration of the lawsuit. The court found that the plaintiffs, which include the American Bar Association and several universities, are likely to succeed on their claim that the department overstepped its authority. The Education Department has not yet commented on the ruling, but the case is expected to proceed to trial later this year.