Democratic AGs in 21 states, DC sue Education Dept over Public Service Loan Forgiveness rule change

Democratic attorneys general in 21 states and Washington, D.C., on Monday sued the Education Department over its Public Service Loan Forgiveness rule change.

Last week, the Trump administration finalized a rule change that said those who are engaged in “unlawful activities” would be unqualified for student debt relief under the PSLF program, which applies to government workers or nonprofit employees after 10 years of payments, The Hill news outlet reported.

The administration defined “unlawful activities” as groups “abetting illegal immigration” or supporting gender transition for minors. The rule change is to go into effect in July.

The Democratic AGs argue that the rule is unlawful and will be used to target President Trump’s political opponents.

“Public Service Loan Forgiveness was created as a promise to teachers, nurses, firefighters, and social workers that their service to our communities would be honored,” New York Attorney General Letitia James said.

“Instead, this administration has created a political loyalty test disguised as a regulation. It is unjust and unlawful to cut off loan forgiveness for hardworking Americans based on ideology. I will not let our federal government punish New York’s public servants for doing their jobs or standing up for our values,” she added.

The attorneys general are concerned that the rule change will be used against “teachers in states with inclusive curricula, health professionals providing gender-affirming care, or legal aid attorneys representing immigrants, could suddenly lose PSLF eligibility through no fault of their own.” 

The states, along with D.C., that are part of the lawsuit are New York, Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, Oregon, Rhode Island, Vermont, Washington, and Wisconsin.

“It is unconscionable that the plaintiffs are standing up for criminal activity,” Under Secretary of Education Nicholas Kent said in a statement. “This is a commonsense reform that will stop taxpayer dollars from subsidizing organizations involved in terrorism, child trafficking, and transgender procedures that are doing irreversible harm to children.”

“The final rule is crystal clear: the Department will enforce it neutrally, without consideration of the employer’s mission, ideology, or the population they serve,” Kent added.

A separate lawsuit was filed by Protect Borrowers and Democracy Forward on Monday over the rule change, along with other cities, two of the largest teachers’ unions in the country, and advocacy groups.

The group's lawsuit argues the rule change is a “blatant violation of the Higher Education Act” and is asking a judge to strike it down.

“This administration has, yet again, unlawfully targeted people who work in the public interest. And so we again are in court,” Democracy Forward President and CEO Skye Perryman said. “Politically motivated retaliation, like what the administration has done here, should have no place in America. We are honored to represent this powerful coalition in defense of the people’s rights.”