While the Trump administration has argued that new restrictions on the size of federal student loans will lower tuition costs, public health officials and Democrats say the measures will exacerbate the country’s serious nursing shortage.

As such, a group of 24 Democratic-led states and the District of Columbia recently sued the federal government seeking to block the new rule, which is set to take effect on 1 July.

If that happens, opponents say, it will not only fail to reduce tuition but also reduce the number of people who pursue careers in medicine, which will particularly hurt rural areas that already have difficulty finding health providers.

“Capping federal loans without capping tuition is like putting less gas in the tank of a car and still wanting to go the same distance,” said Jennifer Zhang, a policy, research and data analyst at Protect Borrowers, a consumer advocacy group.

The new parameters, which Congress approved as part of the One Big Beautiful Bill Act, will limit people pursuing graduate degrees termed “professional”, such as medicine, dentistry and law, to borrowing $50,000 per year, with a maximum of $200,000. Other graduate students, including those seeking to become nurses, physical therapists and nurse anesthetists, will be limited to $20,500 per year and a total of $100,000.

The Trump administration claims that the restrictions will stop graduate schools from continually increasing tuition costs and make education more affordable. Since 2000, the average cost of earning a graduate degree has more than tripled, according to a 2024 report from Georgetown University.

“For the last two decades, graduate students have been able to borrow up to the full cost of attendance, enabling colleges and universities to raise tuition and fees with few constraints while shifting the financial burden on to students,” the US Department of Education stated.

That cost can also lead to significant debt. Among advanced practice nurses, such as nurse practitioners and nurse anesthetists, who took out loans, more than a quarter had balances that exceeded the $100,000 limit, according to a recent study in the Health Affairs Scholar journal.

“If institutions expanded cost and spending in proportion to the availability of credit, it seems very reasonable to think that they could also reduce costs as those limits go down,” said Beth Akers, a senior fellow at the right-leaning American Enterprise Institute, which supports the new limits.

While some researchers attribute the ballooning cost of higher education to the increased availability of financial aid for students – the so-called Bennett hypothesis – the evidence for that is mixed, according to a 2022 Federal Reserve report.

Akers admits that there is no evidence that the new limits will drive down tuition costs. She said that is because “we have never gone in this direction with policy. We have always moved in the direction of expansion.”

Zhang argues that the One Big Beautiful Bill Act will actually lead to an increase in tuition costs. Since the Trump administration has cut funding for Medicaid and the Supplemental Nutrition Assistance Program, states are facing budget shortfalls. In such situations, higher education funding is often cut first.

“Students at public institutions are going to actually see their tuition and cost of attendance likely increase,” Zhang said.

Students will also need to rely more on private loans, Zhang and others say. And whereas the interest on federal student loans for graduate students is 7.9%, private loans can carry an interest rate of almost 18%, according to the Education Data Initiative.

Such increased costs could dissuade people from pursuing careers such as nursing, critics argue.

“This rule will shut talented people out of critical professions and leave communities with fewer healthcare providers they desperately need,” the New York state attorney general, Letitia James, a plaintiff in the lawsuit, stated in a press release. “We cannot afford fewer nurses, fewer providers or fewer opportunities for working people to enter these essential fields.”

If fewer people decide to study nursing, that could be particularly hard on rural areas. While there is a nursing shortage across the United States, it is especially acute outside cities. In urban areas, there were about 98 registered nurses per 10,000 people in 2022, according to a report in the Medical Care journal; in rural areas, there were only 64 nurses per 10,000 people.

For example, Nebraska, a largely rural state, faces a shortage of almost 6,700 nurses, which amounts to 21% of the demand, the Nebraska Center for Nursing reported in 2025.

“The decision to move in this direction really indicates a lack of understanding of the impact on the primary care provider workforce,” said Lepaine Sharp-McHenry, dean of the the University of Nebraska Medical Center College of Nursing.

Coby Rodriguez wants to become a certified registered nurse anesthetist because he met some during his undergraduate education and witnessed their work when his mom was undergoing surgeries for her stage four pancreatic cancer.

“I believe they just hold such a special position in healthcare,” said Rodriguez, who will soon graduate with a master’s in nursing from Johns Hopkins University. “They are the first people to catch adverse events. They are the first people to notify the providers if the family members have any questions.”

He hopes to practice rural medicine in his home state, Washington, and had planned to start school to become a nurse anesthetist after a year of working as an intensive care unit nurse. But because of the new loan limits, Rodriguez now expects to first work three to four years.

He already has about $70,000 in student loan debt, and the additional degree could cost him at least $100,000. Rodriguez, whose mom died in 2021, wants to avoid taking out private loans because he does not have a co-signer, which means he could be subject to higher interest rates.

Rodriguez said the loan limits are already causing some of his classmates to reconsider becoming anesthetists or nurse practitioners.

“The interest rates on private loans, as well as just taking out more money in general, it might not be worth it for some of these salaries,” he said.

Despite the new potential financial hurdle, the University of Nebraska nursing school is slated to have enrollment in its graduate program increase 19% in fall 2026 over fall 2025, Sharp-McHenry said. She attributes that growth to an “aggressive marketing campaign” highlighting “the value of graduate education, especially in our current healthcare environment”.

School officials have also been in contact with private financial institutions to offer loans that would be “very attractive” to prospective students, Sharp-McHenry said: “That would allow them to continue to move on with their educational goals and not be overly concerned about the finance piece.”