More than 20 states led by Democrats have sued the Trump administration over a new rule that would deny student loan forgiveness to some nonprofit and public employees, according to The Associated Press. The states say the Education Department exceeded its authority by changing eligibility for the Public Service Loan Forgiveness (PSLF) program, which cancels federal student debt for government and nonprofit workers after 10 years of payments.
The policy bars loan relief for employees whose organizations are deemed to have a “substantial illegal purpose,” a designation critics argue targets groups serving immigrants and transgender youth. The lawsuit, filed Monday in Massachusetts by states including New York, California, Massachusetts, and Colorado, calls the rule “a political loyalty test disguised as a regulation.”
Education Under Secretary Nicholas Kent defended the overhaul, saying it ensures that “taxpayer dollars don’t subsidize organizations involved in terrorism, child trafficking, or transgender procedures causing irreversible harm to children.” Opponents counter that the rule’s vague language could allow federal officials to cut off forgiveness for entire state agencies, hospitals, or schools based on ideology.
The states and a coalition of cities and nonprofits — including Boston, Chicago, and the National Council of Nonprofits — are asking a federal judge to block the rule before it takes effect. They argue Congress designed PSLF to attract workers to public service jobs, not to let political appointees decide which missions qualify. Additional legal challenges are expected this week from advocacy groups including Robert F. Kennedy Human Rights and the American Immigration Council.
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