Blue States Sue Trump Administration Over Loan Forgiveness Program Changes
A coalition of blue states, spearheaded by New York Attorney General Letitia James, along with a union and municipal coalition led by Randi Weingarten, declared on Monday that they will take legal action against the Trump administration. They allege an “unlawful takeover” of the loan forgiveness program, claiming the administration has removed organizations that it views as violating federal law.
The Department of Education (ED) recently announced that, after extensive rulemaking, it will roll out a revised version of the Public Service Loan Forgiveness (PSLF) program aimed at identifying and excluding entities that do not comply with federal law. This new rule is currently facing two separate lawsuits. One lawsuit has been filed by 21 states and the District of Columbia, while another includes cities like Boston, Chicago, and San Francisco, alongside various educational and pro-immigration groups.
Attorney General James noted that the coalition is contesting a federal regulation that could bar whole state governments, hospitals, schools, and nonprofit organizations from the PSLF program. This would occur if those entities decide independently that the federal government disapproves of their activities, which could include providing immigration assistance or gender-affirming healthcare. James’ office states, “The coalition contends that these sweeping new regulations are unlawful, politically motivated, and intended to penalize groups and organizations that the administration opposes.”
The other lawsuit asserts that the administration is attempting to “silence government and nonprofit organizations engaging in work it disapproves of,” thereby undermining long-standing bipartisan promises to support those who commit to public service careers.
Both lawsuits were filed in a Massachusetts District Court.
Education Undersecretary Nicholas Kent responded to the lawsuits, arguing that it is “unconscionable for the plaintiffs to oppose measures against criminal activities.” He described the changes as necessary reforms to eliminate taxpayer support for organizations linked to activities like terrorism and child trafficking. Kent emphasized that the enforcement of this rule would be impartial, disregarding the mission or ideology of the employers involved.
The PSLF program aims to grant student loan forgiveness to nonprofit and government employees committed to serving the public. The new regulations will disqualify employers involved in “serious illegal actions” such as supporting child sex reassignment surgeries or violating immigration laws.
The plaintiffs express concerns that their programs may still be jeopardized despite their assertion of conducting legitimate activities.
Randi Weingarten, President of the American Federation of Teachers, commented, “PSLF was established by a Republican president and Democratic senators to attract and retain dedicated professionals like teachers and firefighters. Trump’s efforts to impose an ideological test on millions of public servants contradict American values and existing laws. This is an unlawful attack on those who have relied on the PSLF promise, which is now under threat.”
Recently, the Department of Education agreed to continue processing PSLF applications after suspending the program earlier this year, suggesting that such a suspension could potentially be illegal. Meanwhile, the Biden administration has forgiven billions of dollars in student loans through the PSLF program, aiming to aid over 5 million borrowers in the coming years.
