States Sue ED over OBBBA Loan Limits
Published June 01, 2026
By AACOM Government Relations
Federal Policy Higher Education OME Advocate
- On May 1, 2026, ED issued its final rule implementing new student loan limits under the One Big Beautiful Bill Act (OBBBA), creating a new distinction between "graduate" and "professional" degree programs, capping annual borrowing for graduate students at $20,500 and professional students at $50,000, while eliminating the Graduate PLUS loan program.
- In response, a coalition of 25 state attorneys general and the District of Columbia filed a lawsuit in federal court in Maryland on May 19, 2026, arguing that many excluded programs already meet Congress’s intended definition of “professional degree” under the OBBBA. The lawsuit contends that ED exceeded its statutory authority by imposing additional unauthorized criteria. The states are asking the court to block the rule and declare it unlawful.
- The rule is set to go into effect on July 1, 2026. View AACOM’s analysis of the final rule for more information.