Democratic States Sue over PSLF Program Changes
Roughly two dozen states led by Democrats, along with the District of Columbia, have initiated a lawsuit against the Department of Education regarding recent modifications to the Public Service Loan Forgiveness (PSLF) program.
The changes, which were announced shortly before, clarify that organizations involved in what the Department calls “illegal activities” won’t qualify for PSLF aid. Employees in government and nonprofits may still be eligible after making a decade’s worth of payments. Activities deemed illegal include supporting terrorism, illegal immigration, gender reassignment in minors contrary to laws, child trafficking, and others.
Democrats are alleging that these rule changes are intended to target political opponents of former President Donald Trump. “Public Service Loan Forgiveness was created as a promise to teachers, nurses, firefighters, and social workers that their service to their communities would be honored,” remarked New York Attorney General Letitia James.
James continued, “Instead, this administration has crafted a political loyalty test disguised as regulation. Punishing hardworking Americans based on their beliefs is not only unjust but illegal. We won’t permit the federal government to penalize New York public servants who fulfill their duties and embody our values.”
States have identified specific issues with the rule. For instance, “Teachers using inclusive curricula, medical professionals who provide gender-affirming care, and legal aid lawyers for immigrants could suddenly lose their PSLF eligibility without having done anything wrong.”
In a statement, Education Undersecretary Nicholas Kent described the lawsuit as unconscionable, asserting, “This is a common-sense reform designed to stop taxpayer money from supporting groups involved in serious crimes, including terrorism and child trafficking.” He was adamant that the new rule would be enforced impartially, without regard to the ideologies of the organizations affected.
Separately, two advocacy groups, Protect Borrowers and Democracy Forward, along with multiple cities and major teachers’ unions, are filing lawsuits as well, claiming these changes to the PSLF program represent a serious breach of the Higher Education Act.
Skye Perryman, president and CEO of Democracy Forward, emphasized that the administration is unlawfully targeting those who serve the public, stating, “Politically motivated retaliation has no place here. We are proud to represent this important coalition that upholds the rights of our people.”
The Department of Education made these rule updates following an executive order from President Trump earlier in the year. The directive requires the Education Secretary to revise the PSLF program to ensure that only those engaged in legitimate public service are eligible. The executive order criticized the previous administration for misusing the PSLF program and outlined concerns about taxpayer funds being directed to organizations that may compromise national security and public welfare.
Trump’s order stated that as President, it is his responsibility to defend the Constitution and national security, highlighting that individuals working for organizations involved in substantially illegal activities would not qualify for loan forgiveness.
