A recent Education Department rule fails to remedy overborrowing while hurting already-disadvantaged students.
The U.S. Department of Education’s recent rule, Reimagining and Improving Student Education (RISE), reached the courthouse almost before it reached campus financial aid offices. In May, a coalition of 25 states and the District of Columbia sued the Education Department, arguing that the RISE rule unlawfully rewrites the definition of “professional degree” that the U.S. Congress adopted in the Working Families Tax Cut Act. In late June, a federal district court stayed the Education Department’s definition of 11 “professional” degrees, days before the new student borrowing caps took hold, prompting the Education Department to expand its list of professional degrees on an interim basis. In August, four national labor unions filed a third challenge, contending that the definition and the RISE rule’s narrowed interim exception for current borrowers are contrary to law, that they are arbitrary and capricious, and that the rule’s compressed timeline before taking effect violates the timeline with which the Education Secretary must comply under the Higher Education Act.
The litigation asks whether the Education Department implemented the statute lawfully. During the public comment period before the rule was finalized, however, universities and medical schools raised a deeper question, one that the courts will not decide: whether the RISE rule can deliver the restrained tuition growth and reduced overborrowing that the Department promises. The best available evidence indicates that it cannot and that its costs will fall hardest on low-income, first-generation, and underrepresented students.
The RISE rule implements the student loan provisions of the Working Families Tax Cut Act. It eliminates the Grad PLUS program, which since 2006 allowed graduate and professional students to borrow up to the full cost of attendance and caps federal borrowing at $20,500 annually and $100,000 in aggregate for most graduate students. The rule reserves higher ceilings of $50,000 annually and $200,000 in aggregate for 11 professional fields, including medicine, dentistry, and law, while leaving fields such as advanced practice nursing, social work, public health, and education subject to the lower caps. The stakes are substantial: In the 2023–24 award year, more than 440,000 students borrowed roughly $14 billion through Grad PLUS.
The Education Department’s cost-containment rationale rests on the Bennett hypothesis, Education Secretary William Bennett’s 1987 claim that federal aid enables institutions to raise tuition. Andrew Gillen’s refinement holds that aid capture is conditional: Institutions convert aid into higher prices where aid is broadly available, institution’s selectivity of applicants is high, and tuition is unregulated. The empirical support for capture, however, concentrates outside the markets that the RISE rule governs. Stephanie Cellini and Claudia Goldin found that for-profit institutions eligible for federal aid charge roughly 78 percent more than comparable ineligible institutions, and economists at the Board of Governors of the Federal Reserve System estimated that sticker prices rise about $0.60 for each additional dollar of subsidized loans, concentrated at for-profit and two-year colleges. Graduate and professional markets behave differently. Robert Kelchen found only modest links between the 2006 Grad PLUS expansion and law school tuition and no clear evidence that business or medical school tuition rose after the expansion. Accreditation and capacity constraints in licensed fields prevent institutions from expanding enrollment to absorb available credit; prices respond instead to competition for applicants. The RISE rule extends a remedy developed for one sector into another where its empirical foundation is thin, a mismatch that commenters pressed and that the Education Department’s responses to 80,793 public comments did not resolve.
Even if the premise were sound, the rule’s distributional consequences would remain. Grad PLUS was the one federal instrument that covered living expenses for students without family wealth. Researchers at the Federal Reserve Bank of Philadelphia estimate that 28 percent of graduate borrowers will exceed the new limits, requiring an average of $21,700 per year in private financing, and that 38 percent have subprime credit or no credit score and could not qualify without a cosigner. For them, the private market is not an alternative but a closed door. For students who do qualify, the concept of predatory inclusion predicts incorporation on punitive terms: higher interest rates, weaker protections, and no income-driven repayment or loan forgiveness. These burdens track existing inequality. The Black-white student debt gap widens even at higher levels of parental wealth, and nearly one in five institutions whose students borrowed through Grad PLUS is a federally designated minority-serving institution. The fields from “professional degrees,” meanwhile, staff the safety-net clinics, schools, and community services that underserved communities depend on.
The pending lawsuits target precisely the choices where the Department exercised the most discretion, and they arrive at a moment when courts owe agencies less deference than at any point in decades. The first dispute is textual. Congress defined professional degree in open-ended terms, and the RISE rule closed that definition into a list of eleven programs. After the U.S. Supreme Court’s decision in Loper Bright Enterprises v. Raimondo, courts interpret statutes independently rather than deferring to agency readings, so the challengers need only persuade a court that the broader reading is better. Even if the Department’s reading survives, its reasoning must survive too. Under the Court’s decision Motor Vehicle Manufacturers Association v. State Farm, an agency must grapple with the evidence and significant alternatives. The comment record placed both considerations squarely before the Education Department in the form of workforce data, a broader definition, and preservation of the Health Professions Loan Exemption. The Department adopted none.
Finally, a well-reasoned rule must issue on time. The Higher Education Act directs the Department to publish Title IV regulations, which govern student borrowing, by November 1 to take effect the following July 1, yet the Department published on May 1, 2026, and made the RISE rule effective 61 days later. The rule’s preamble reasons that the statute’s own effective dates made calendar compliance impossible, so Congress waived the requirement by necessary implication, a theory that the courts will now test. As administrative law scholars observe, discretionary agency choices now face markedly closer judicial review.
Cost control is a legitimate goal, but targeted instruments would serve it better than blanket caps. The Public Service Loan Forgiveness program widens access to public-interest careers, scholarship aid predicts workforce outcomes more reliably than borrowing limits, and restoring the Health Professions Loan Exemption would correct the RISE rule’s most consequential exclusions. Whatever the courts decide about how the Department wrote the RISE rule, policymakers must still answer for what the rule will do. On the best available evidence, it will not restrain tuition. It will instead ration advanced study by family wealth, at the expense of the low-income, first-generation, and underrepresented students whom federal student aid exists to serve.
