AFSCME and Cities Sue Over Changes to Public Service Loan Forgiveness

Legal Battle Erupts Over Public Service Loan Forgiveness Program Changes

In a significant legal development, AFSCME, along with various cities, unions, and non-profit organizations, is challenging the U.S. Department of Education over recent amendments to the Public Service Loan Forgiveness (PSLF) program. This coalition argues that the modifications, introduced by the Trump-Vance administration, are unlawful and threaten the integrity of the PSLF program.

The lawsuit contends that the administration's changes are aimed at undermining organizations and government bodies that oppose its policies. This move is seen as a violation of a longstanding bipartisan commitment by Congress to support public servants.

Under the new rule, the Secretary of Education gains the power to exclude government and nonprofit employers from the PSLF program if they conflict with the administration's policies. This has raised concerns among the coalition, which cautions that such measures could discourage workers in essential public service roles, such as teachers and healthcare providers, from benefiting from loan forgiveness.

Filed in the U.S. District Court for the District of Massachusetts, the lawsuit claims that the new rule breaches the Higher Education Act (HEA). AFSCME and its allies are urging the courts to overturn the rule to maintain the PSLF program's original purpose, which is to offer debt relief to those serving their communities irrespective of political leanings.

"The Public Service Loan Forgiveness program allows nurses, first responders, corrections officers, school staff and more to support their families while serving their communities," stated AFSCME President Lee Saunders. “Gutting this program will worsen the public service staffing crisis while weakening the essential services communities rely on. We’re filing this lawsuit to protect the Public Service Loan Forgiveness program so working people can continue to afford to serve their communities in the jobs they love.”

The plaintiffs in this legal action include the cities of Albuquerque, Boston, Chicago, and San Francisco, among others, along with several nonprofit organizations like the National Association of Social Workers and the National Education Association.

Represented by Protect Borrowers and Democracy Forward, the coalition argues that the administration's actions are a politically motivated retaliation that undermines public interest work. "This administration has, yet again, unlawfully targeted people who work in the public interest. And so we again are in court," said Skye Perryman, president and CEO of Democracy Forward. "Politically motivated retaliation, like what the administration has done here, should have no place in America."

Persis Yu, deputy executive director and managing counsel at Protect Borrowers, added, "ED’s PSLF rule is an illegal attempt to weaponize the federal government against its own people. The Trump-Vance administration is telling a generation of dedicated public servants that their work only counts if it aligns with a MAGA political agenda. This betrays the nonpartisan promise of PSLF and the core principles of our nation."