Judge orders Education Department to count naturopathic medicine as a 'professional' degree under student-loan caps

A federal judge in Oregon has ruled against the Education Department's plan to limit which graduate programs get the higher federal borrowing cap.

U.S. District Judge Michael Simon found that the department exceeded its authority when it left naturopathic medicine off its list of "professional" degrees. He issued a preliminary injunction on the department's definition and ordered the agency to qualify naturopathic medicine for the higher limit.

It is the third ruling by a federal judge blocking the plan from taking effect.

What the department wanted

The rule was set to take effect July 1. It would have limited the "professional" label to 11 programs, including medicine and dentistry, and left out fields such as nursing and social work.

Only the 11 programs would get a $200,000 lifetime borrowing cap. Every other graduate program would get $100,000.

Lawmakers and advocates pushed back on the list. They argued that some excluded programs cost enough to need higher caps.

The ruling

The plaintiffs were naturopathic colleges and students. They argued that exclusion would push students toward private loans, which often carry higher interest rates and are not eligible for federal loan forgiveness. Naturopathy associations also said the caps would cut school revenue if students decided not to enroll.

Simon agreed the harm was "imminent." Students are deciding right now whether they can afford to enroll for the coming academic year.

The department told students on its Federal Student Aid site to contact their schools to see how the ruling affects them.

A pattern of losses

At the end of June, a separate court decision blocked the narrowed definition from taking effect. The department responded by publishing an updated list of 30 programs that would qualify for the higher limit while the litigation continues.

The department said then that it is confident the narrowed definition is "lawful and will continue to defend it." Nothing in the Oregon ruling changes that stated position.

The administration has also lost ground on loan forgiveness. According to court filings, it agreed on Oct. 21 to dismiss two appeals seeking to reinstate restrictions on Public Service Loan Forgiveness. A third appeal remains pending.

The loan caps themselves

The caps come from the One Big Beautiful Bill Act, and the court fight is over who gets sorted into which bucket, not whether caps exist.

The Center for American Progress, a left-leaning think tank, estimates the new limits will create financing gaps for 13 percent of master's degree borrowers and 46 percent of professional degree borrowers. It says those shares are higher for women and borrowers of color. Those are the group's projections, not government figures.

The scale of the underlying debt is not in dispute. The Education Department said in June that 42.6 million people hold federal student loans totaling $1.7 trillion. As of March 2026, about 9 million borrowers had $220 billion in federal loans in default. The Center for American Progress puts the number of borrowers in default at 9.5 million.

That is taxpayer money sitting in unpaid loans, and neither side of this fight has a plan that makes it go away.

Collections and interest rates

The Washington Sun reported Monday, citing unnamed sources, that the administration is preparing to roll out new measures against borrowers in default. The measures reportedly include hiring debt collectors and garnishing wages and benefits. The sources said the rollout is planned for after the midterm elections, which are today, Nov. 3. The Education Department has not publicly detailed such a plan.

Separately, the administration announced last week a system called the Student Tuition and Transparency System. Under it, "undergraduate programs will be required to demonstrate that their graduates earn more than the typical high school diploma holder, and graduate programs will be required to demonstrate that their graduates earn more than the typical bachelor's degree holder." Programs that fail would lose access to federal loans.

Former U.S. Bankruptcy Judge Sarah Sharer Curley, who served in Arizona until 2014 and has written a book on bankruptcy, told CNBC the administration's changes will "most likely increase" bankruptcy filings. More than half a million personal bankruptcy cases were filed in 2025, according to the Administrative Office of the U.S. Courts, almost 50 percent more than three years earlier.

Interest rates are the other live issue. Rates on newer federal loans run from 6.52 percent to 9.07 percent. On Oct. 24, President Trump said he "might" support a bill capping federal student loan interest at 2.5 percent, according to a video posted by Rep. Anna Paulina Luna (R-Fla.). Luna wrote that Trump "will support" the cap. Trump's own words, as she posted them, were more tentative.

Rep. Michael Lawler (R-N.Y.) introduced a bill in March 2025 to cut the rate to 2 percent. It remains in the House Committee on Education and the Workforce. Democrats Rep. Joe Courtney of Connecticut and Sen. Peter Welch of Vermont reintroduced a bill March 24 to let borrowers refinance federal loans at zero percent.

No bill with a rate cap has moved out of committee. The Oregon injunction is preliminary, so the underlying case over the department's definition of "professional" degrees is still ahead.