Attorneys general from 21 Democratic states, along with Washington, D.C., and two advocacy groups, have filed a lawsuit against the Department of Education regarding recent changes to the Public Service Loan Forgiveness (PSLF) program.
Last week, a rule finalized by the Trump administration declared that individuals engaged in what it labeled “illegal activity” would no longer qualify for PSLF, which offers loan forgiveness to government and nonprofit employees after a decade of payments.
The administration categorized “illegal activities” to include organizations that “aid illegal immigration” or help minors change their gender. These modifications are slated to take effect next July.
A coalition of states argues that this rule is unlawful and serves to target Trump’s political adversaries.
“Public Service Loan Forgiveness was designed as a commitment to teachers, nurses, firefighters, and social workers, acknowledging their contributions to their communities,” commented New York Attorney General Letitia James.
“Instead, this administration has imposed a political loyalty test masquerading as regulation. To deny loan forgiveness to dedicated Americans based on ideology is both unfair and unlawful. We will not permit the federal government to penalize New York public servants who perform their duties and uphold our values,” she added.
Concerns arise that this rule might impact “teachers in states with inclusive curricula, medical professionals offering gender-affirming care, legal aid attorneys assisting immigrants, and others who could suddenly become ineligible for PSLF through no fault of their own.”
The lawsuit includes parties from New York, Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, Oregon, Rhode Island, Vermont, Washington, Wisconsin, and D.C.
Education Undersecretary Nicholas Kent responded, stating, “It is shocking for the plaintiffs to defend their unlawful actions. This policy is a sensible reform aimed at stopping taxpayer dollars from supporting entities involved in terrorism, child trafficking, and harmful transgender procedures.” He added, “The final rule is straightforward. The Department will enforce it impartially, regardless of the employer’s mission, ideology, or the community served.”
Additionally, a separate lawsuit targeting the PSLF changes has been initiated by Protect Borrowers and Democracy Forward, with backing from various cities, two large teachers unions, and advocacy groups.
This lawsuit claims that the rule change violates the Higher Education Act and seeks to have it overturned.
“This administration has once again unlawfully targeted individuals serving the public good, which is why we are returning to court,” said Skye Perryman, president and CEO of Democracy Forward. “Politically motivated retaliation is unacceptable in the United States. We are proud to represent this strong coalition advocating for our people’s rights.”
