A federal judge in Washington, D.C., on Wednesday delivered a last-minute reprieve to graduate and professional students, blocking the Education Department from enforcing new loan caps that were scheduled to take effect next week. The temporary injunction, issued by U.S. District Judge Beryl Howell, halts a key provision of the One Big Beautiful Bill Act signed by President Trump last year.
Judge Howell ruled that the department overstepped its authority by adding restrictions to the definition of a “professional degree” that were not authorized by Congress. The ruling cited the Administrative Procedure Act, which governs how federal agencies craft regulations and allows courts to review those processes for legality. This is not the first time the Trump administration has faced judicial pushback over procedural overreach—similar challenges have emerged on issues ranging from voter data access to immigration enforcement. For instance, a federal judge previously blocked the administration's attempt to create a national voter database, citing similar APA violations.
The blocked rule would have imposed strict borrowing limits: graduate students could take out no more than $20,500 annually, with a lifetime cap of $100,000, while professional students—those in law, medical, or business programs—would have been limited to $50,000 per year and $200,000 total. These caps represented a dramatic reduction from the current system, which allowed students to borrow the full cost of attendance through the Graduate PLUS loan program.
The Education Department has not yet commented on the ruling. The agency had been under pressure to implement the new limits after the One Big Beautiful Bill Act mandated a phaseout of the Graduate PLUS program, which has long been a lifeline for students in expensive professional programs. Critics of the old program argued it contributed to rising tuition costs and student debt burdens, while supporters said it provided essential access for students from lower-income backgrounds.
The timing of the ruling is particularly significant: the new limits were set to take effect on July 1, just days away. Borrowers and university financial aid offices had been scrambling to adjust, with many graduate programs warning that the caps could force students to either take on private loans or abandon their studies altogether. The temporary block gives Congress and the administration more time to debate the policy, though the underlying law remains in place.
This legal setback adds to a growing list of judicial checks on the Trump administration's regulatory agenda. In recent months, courts have also blocked DOJ subpoenas for transgender youth medical records and permanently struck down an executive order requiring citizenship proof for voting. The pattern underscores the ongoing tension between the executive branch's push for rapid policy changes and the judiciary's role in enforcing procedural safeguards.
The ruling leaves the future of graduate student lending uncertain. While the temporary block provides short-term relief, the One Big Beautiful Bill Act still directs the Education Department to impose limits and eventually eliminate the Graduate PLUS program. Lawmakers on both sides of the aisle have expressed concerns about the impact on higher education access, but no consensus has emerged on an alternative. For now, graduate and professional students can breathe easier, but the broader debate over student loan policy is far from over.
