Coalition Sues to Block PSLF Rule Change, Citing Unconstitutional Impact

Coalition Challenges PSLF Changes in Federal Court

WASHINGTON — A lawsuit aiming to halt modifications to the Public Service Loan Forgiveness (PSLF) program was filed today by a diverse group of cities, unions, and nonprofits against the U.S. Department of Education (ED). The suit alleges that the Trump-Vance Administration is unlawfully altering the PSLF program, potentially undermining public service workers' debt relief, and breaking a long-standing bipartisan commitment by Congress.

The plaintiffs encompass a range of organizations, including the City of Albuquerque, City of Boston, City of Chicago, City and County of San Francisco, County of Santa Clara, Amica Center for Immigrant Rights, and the American Federation of State, County and Municipal Employees, among others. Legal representation is provided by Protect Borrowers and Democracy Forward, with some entities representing themselves.

Concerns among public service employers and organizations suggest that the proposed PSLF adjustments may deter individuals from pursuing careers in public service roles, such as teaching and healthcare, particularly in cities targeted by the administration’s policies.

Access the lawsuit document, National Council of Nonprofits et al. v. McMahon, here.

AFT President Randi Weingarten voiced strong opposition, stating, “Public Service Loan Forgiveness was created by a Republican president and Democratic senators to help attract and retain teachers, nurses, firefighters and so many others who’ve dedicated their careers to helping others.” She further criticized the administration's attempt to impose “an ideological litmus test,” which could deter public service workers and burden them with debt.

Additional statements from the plaintiffs are available here.

The new PSLF rule permits the Secretary of Education to exclude certain government and nonprofit employers from program eligibility if they oppose the administration's stance, potentially affecting a wide array of organizations, including those offering sanctuary or advocating for immigrant and LGBTQIA+ rights.

Filed in the U.S. District Court for the District of Massachusetts, the lawsuit claims this new rule contravenes the Higher Education Act (HEA), which guarantees PSLF eligibility for government and 501(c)(3) nonprofit employers, and infringes upon First Amendment rights.

The coalition seeks the judicial repeal of the rule to preserve the original bipartisan intent of the PSLF program, ensuring it remains a non-partisan support mechanism for those serving their communities.

Further Reading

Opposition Letter: 250+ Organizations Demand Halt to PSLF Changes

Proposed Language Critique: Criticism of ED’s Proposed PSLF Language

Negotiated Rulemaking Blog: Analysis of PSLF Negotiated Rulemaking

Executive Order Response: Organizational Warning Against PSLF Weaponization

Borrower Protection Advisory: Advocacy for Borrower Protections

Borrower Stories Collection: Voices Behind the Student Debt Crisis