NC joins lawsuit against US Department of Education over health care student loan changes

North Carolina has joined a lawsuit filed by 24 other states and Washington, D.C., against the U.S. Department of Education over new student loan regulations that exclude post-baccalaureate nursing degrees from federal 'professional degree' status. The rule, finalized May 1 and taking effect July 1, limits graduate nursing students to $20,500 in annual loans, capping their total at $100,000—a restriction that could hinder advanced education for nurse practitioners and doctoral nurses, who often train future nursing staff. The state faces a worsening nursing shortage, with projections showing a need for at least 12,500 more nurses by 2033, according to the Sheps Center for Health Services Research at UNC Chapel Hill. Researchers like Erin Fraher warn the loan limits will exacerbate workforce gaps, as advanced nursing programs typically require five or more years to complete and incur high tuition costs. For example, Duke University charges about $35,000 per semester for advanced nursing degrees, while UNC Chapel Hill’s graduate program costs $18,610 per semester. Attorney General Jeff Jackson called the rule change 'unlawful,' arguing the Department of Education overstepped Congress’s explicit definition of professional degrees. The lawsuit contends the new classification unfairly excludes nursing, physical therapy, and physician assistant programs, which rely on federal loans for living expenses and clinical training. Many students, like Leigh Habegger—a physician assistant student at Wake Forest University—depend on these loans to balance education with work and clinical hours. The rule’s impact extends beyond North Carolina, where the aging population will soon surpass the number of residents under 18. State officials emphasize that restricting loan access for advanced nursing education threatens to deepen an already critical labor shortage in healthcare. The lawsuit, led by Maryland’s Attorney General, seeks to overturn the rule on grounds of legislative overreach and unfair treatment of essential healthcare professions.