On June 24, 2026, a federal judge in Washington, D.C. blocked a key part of the Education Department's RISE rule — just seven days before major graduate loan changes take effect on July 1. The court preserved access to the $50,000-per-year borrowing cap for nurse practitioner, physician associate, and other licensed health professions graduate students who would have been cut to $20,500 per year under the Department's narrower definition.

Starting July 1, 2026, graduate borrowers face a new two-tier federal loan system. Most graduate students are capped at $20,500 per year and $100,000 lifetime. Students in qualifying "professional degree" programs can borrow up to $50,000 per year and $200,000 lifetime.

The problem: the Education Department decided that nursing and physician associate programs don't qualify as professional degree programs. A federal court just disagreed.

What the Education Department Did

The One Big Beautiful Bill Act created the two-tier system. Congress defined "professional degree" by incorporating an existing federal regulation at 34 C.F.R. § 668.2 — a three-part test in place since 2007.

When the Department wrote its RISE rule (Reimagining and Improving Student Education) to implement the law, it listed 11 qualifying programs: medicine, pharmacy, dentistry, optometry, law, veterinary medicine, osteopathic medicine, podiatry, chiropractic, theology, and clinical psychology. Then it added two requirements Congress had not written into the law — programs had to be at least six years long and match specific four-digit classification codes. It also created a "free-from-supervision" requirement to exclude programs where graduates work under physician oversight.

Those extra requirements cut nurse practitioners, physician associates, physical therapists, and other licensed healthcare professions out of the higher loan tier.

$29,500

What the Court Ruled

The U.S. District Court for the District of Columbia issued a nationwide stay on June 24, 2026, in American Association of Nurse Practitioners v. McMahon — a consolidated case that also included PA Education Association v. Department of Education.1 The American Association of Physician Associates (AAPA) and the Physician Associate Education Association (PAEA) were among the organizations that brought the original suits.2

The court stayed two parts of the RISE rule under Section 705 of the Administrative Procedure Act:

  1. The Department's expanded criteria requiring minimum program length and specific classification codes
  2. The "free-from-supervision" requirement the Department created on its own

The judge found that the plaintiffs were likely to succeed on their core argument: Congress incorporated the existing three-part regulatory test when it wrote the law, and the Department cannot layer on additional requirements Congress didn't specify.3

With those two provisions stayed, the operative test reverts to the original 34 CFR 668.2 standard. That test asks whether: (1) the degree signals completion of requirements to begin practice in a profession; (2) the degree represents professional skill beyond a bachelor's level; and (3) professional licensure is generally required. Nursing and PA programs can meet all three.

Because the court issued an APA Section 705 universal stay rather than a narrow injunction, it covers all institutions and students nationwide — not just those affiliated with the organizations that sued. No school has to be a party to the case to benefit.

What This Means for Students

If you are enrolled in or starting a nurse practitioner, physician associate, physical therapy, or similar licensed health professions graduate program this fall, here is what you need to know.

The path to the $50,000/year cap is now open — but it is not automatic. The court's ruling does not certify any specific program at the professional level. Each school must determine whether its program meets the 34 CFR 668.2 three-part test and then formally certify students at the professional borrowing level. The Education Department has not yet issued guidance on exactly how schools should make that determination.3

The case is also not over. The stay is preliminary while litigation continues. If the Department ultimately wins on the merits, the narrower caps could be reimposed. Students who start programs under the broader standard could face a mid-program change in what they can borrow.

Even with the court's ruling, you cannot assume your program will certify you at the $50,000/year rate. Contact your school's financial aid office this week and ask directly: "Is our program being certified as a professional degree program under 34 CFR 668.2?" If your school has not yet made that determination, get a timeline and ask about contingency options.

Who Else This Affects

The ruling is most visible in nursing and PA programs, but the three-part test covers any program where: the degree is required to start practicing a profession, it signals skill beyond a bachelor's degree, and professional licensure is generally required. Mental health counselors, social workers with clinical licensure requirements, and certain therapy programs may also be able to qualify under the reverted standard — though each program must make its own determination.

Next Steps

Footnotes

  1. NASFAA. (2026, June 25). Court Temporarily Pauses Key Parts of Professional Student Definition Days Before July 1 Effective Date. National Association of Student Financial Aid Administrators. nasfaa.org. ↩

  2. AAPA. (2026, June). Physician Associate Organizations Sue Department of Education to Protect PA Students' Access to Federal Student Loans. American Association of Physician Associates. aapa.org. ↩

  3. NAICU. (2026, June 26). Court Ruling Suspends RISE Definition of Professional Degree. National Association of Independent Colleges and Universities. naicu.edu. ↩ ↩2