Editor’s Note: The following article was originally published in the National Association of Scholars’s weekly CounterCurrent newsletter on July 7, 2026. My colleague, Kali Jerrard, does an excellent job each week analyzing the latest developments in higher education, and I’m happy to crosspost her work here. To subscribe to CounterCurrent or browse past editions, visit the National Association of Scholars’s CounterCurrent archive.

The Department of Education (ED) has officially rolled out its new, “simplified” student loan repayment programs to make higher education more affordable.

The 2025 One Big Beautiful Bill Act (OBBBA) paved the way for these recent reforms to the student loan system and process. So, as of July 1, borrowers can enroll in the new Tiered Standard repayment program or the new income-driven Repayment Assistance Program. This overhaul effectively ends the Biden-era Saving for a Valuable Education program, as I wrote about recently. Borrowers will have 90 days to choose a new repayment program, or the government will choose for them. How the kinks in the system shake out remains to be seen, as borrowers are already reporting problems. And if you recall, adding to the confusion is the transfer of millions of student loan accounts to the U.S. Department of the Treasury for oversight.

Confusion and snafus plaguing the student loan system? Surprising? No. We’ve seen it all before. Hopefully, these major overhauls will streamline the process going forward.

While that works itself out, there have been a few other challenges to the student loan system.

A Judge for the U.S. District Court for the District of Columbia ruled last week that the ED must expand its definition of a “professional” degree when determining eligibility for student loans, pending final resolution of further litigation. This ruling comes after the ED, at the end of last year, decided to classify certain degrees as “nonprofessional” to cap student loan eligibility, which I wrote about last December. As a reminder of the distinction between “professional” and “nonprofessional” degrees, as defined by ED, “The definition of a ‘professional degree’ is an internal definition used by the Department to distinguish among programs that qualify for higher loan limits, not a value judgment about the importance of programs. It has no bearing on whether a program is professional in nature or not.”

Why is this distinction important? 

The OBBBA limited the amount that graduate students pursuing “nonprofessional” degrees could borrow to $20,500 per year, or up to $100,000 in total, while graduate students pursuing “professional” degrees could borrow up to $50,000 per year, or $200,000 total. Capping the amount a graduate student can borrow was an effort to address the student loan crisis and, in turn, incentivize colleges and universities to lower tuition rates.

David Randall, writing for Minding the Campus, discusses this ruling handed down by Judge Beryl A. Howell and its implications for future lawsuits over federal student lending. Randall notes that judges are likely to be sympathetic to law school graduates who need to borrow heavily for their education, especially since law school tuition has more than doubled since 1980. He argues that this sympathy may be self-defeating. By allowing virtually unlimited borrowing to continue, judges may be preserving the very tuition inflation that forced them and today’s students to borrow so much in the first place. So, Randall notes,

This is a surmountable challenge. In effect, education reformers need to leave as little room as possible for judicial interpretation in future education reform bills. But it does suggest that education reformers should pay special attention to lowering the cost of law school. Lawyers and judges are a core component of our ruling classes, and they should not be professionally prejudiced to sympathize with debtors to the government fisc—and thereby serve the interest of the smiling university loan-sharks who benefit from this weaponized sympathy.

In addition to this, two federal court judges struck down a Trump administration rule—created by an Executive Order last year—that “would have allowed the Education Department to disqualify employers from participating in a student loan forgiveness program for public servants.” The loan forgiveness program in question is the Public Service Loan Forgiveness (PSLF) Program, established by Congress in 2007. A summary of the PSLF Program, 

The program is open to government and nonprofit employees like schoolteachers, public defenders and librarians. After they make 120 qualifying payments in an income-driven repayment plan, which requires at least 10 years of service in qualifying jobs, any remaining balance is eliminated.

The Trump rule sought to restrict PSLF Program benefits to exclude organizations that support or engage in “activities that have a substantial illegal purpose,” not limited to aiding or abetting violations of Federal immigration laws, illegal discrimination, and “gender-affirming” care for children. If the rule had taken effect, employees of such organizations would have been ineligible for the PSLF Program forgiveness. The judges ruled that the Trump administration exceeded its authority and that the rule violates the First Amendment, along with the fact that Congress had already clearly defined the workers eligible for the PSLF Program.

It goes to show, yet again, that EOs are not law and will often be successfully challenged in court. While ED Under Secretary of Education Nicholas Kent said that the ED “stood ‘behind this common-sense policy to ensure that taxpayer dollars are never used to subsidize illegal activities,’ and was evaluating next steps,” the ED and the Trump administration would do well to remember this fact. Many of their higher education reform efforts aren’t without merit, but legislation, not litigation, will ensure these reforms last. Because at this point, the Trump administration’s crusade to rid higher education of wokeness and fix the student loan crisis has struggled to gain a firm footing.