More than 20 Democrat-led US states have launched a legal challenge against President Donald Trump’s new policy reshaping the Public Service Loan Forgiveness (PSLF) programme. The policy, finalised recently by the US Department of Education, could block thousands of teachers, students and other public workers from receiving student loan forgiveness if their employers are deemed to have a “substantial illegal purpose.”
The states argue that the new rule undermines the purpose of the PSLF scheme, which was created in 2007 to help graduates working in government and non-profit sectors have their remaining federal student loans forgiven after 10 years of qualifying payments. The lawsuit contends that the administration has overstepped its legal authority and risks destabilising public sector workforces already facing shortages.
States lead coordinated legal action
The legal challenge was filed in Massachusetts and is led by New York, Massachusetts, California and Colorado. The states claim the policy unlawfully restricts access to loan forgiveness and imposes vague standards. They have asked a federal judge to declare the rule invalid and block its enforcement.
New York Attorney General Letitia James, quoted by the Associated Press, described the regulation as “a political loyalty test disguised as a regulation,” saying it is “unjust and unlawful to cut off loan forgiveness for hardworking Americans based on ideology.”
A coalition of US cities, including Boston, Chicago, Albuquerque, San Francisco and Santa Clara, joined by the National Council of Nonprofits, has also filed a separate lawsuit in Massachusetts. Another suit is expected on behalf of the Robert F. Kennedy Human Rights organisation, the American Immigration Council and The Door, a legal aid group, represented by Student Defense and Public Citizen.
Policy changes under scrutiny
Under the new rule, employers may lose PSLF eligibility if federal officials determine they engage in activities such as “chemical castration” of children, human trafficking, illegal immigration, or support for terrorist groups. “Chemical castration” is defined as using hormone therapy or puberty-blocking drugs, which are common in gender-affirming care for transgender youths.
Education Under Secretary Nicholas Kent, in a statement quoted by the Associated Press, said the reform ensures “taxpayer dollars do not subsidise organisations involved in terrorism, child trafficking, and transgender procedures that are doing irreversible harm to children.” He added that the Department would apply the rule neutrally, without regard to ideology or mission.
Concerns for public sector workers
The states argue that the Education Department has introduced overly broad terms such as “substantial illegal purpose,” potentially excluding entire sectors like schools, hospitals and local government agencies from PSLF eligibility. They contend Congress never authorised such discretion and that the change violates the intent of the 2007 law.
Since its creation, the PSLF programme has cancelled student loans for over one million Americans, including teachers, nurses, firefighters and public defenders. Critics of the new rule warn that its implementation could jeopardise loan relief for thousands of students and educators across the US.
The states argue that the new rule undermines the purpose of the PSLF scheme, which was created in 2007 to help graduates working in government and non-profit sectors have their remaining federal student loans forgiven after 10 years of qualifying payments. The lawsuit contends that the administration has overstepped its legal authority and risks destabilising public sector workforces already facing shortages.
States lead coordinated legal action
The legal challenge was filed in Massachusetts and is led by New York, Massachusetts, California and Colorado. The states claim the policy unlawfully restricts access to loan forgiveness and imposes vague standards. They have asked a federal judge to declare the rule invalid and block its enforcement.
New York Attorney General Letitia James, quoted by the Associated Press, described the regulation as “a political loyalty test disguised as a regulation,” saying it is “unjust and unlawful to cut off loan forgiveness for hardworking Americans based on ideology.”
A coalition of US cities, including Boston, Chicago, Albuquerque, San Francisco and Santa Clara, joined by the National Council of Nonprofits, has also filed a separate lawsuit in Massachusetts. Another suit is expected on behalf of the Robert F. Kennedy Human Rights organisation, the American Immigration Council and The Door, a legal aid group, represented by Student Defense and Public Citizen.
Policy changes under scrutiny
Under the new rule, employers may lose PSLF eligibility if federal officials determine they engage in activities such as “chemical castration” of children, human trafficking, illegal immigration, or support for terrorist groups. “Chemical castration” is defined as using hormone therapy or puberty-blocking drugs, which are common in gender-affirming care for transgender youths.
Education Under Secretary Nicholas Kent, in a statement quoted by the Associated Press, said the reform ensures “taxpayer dollars do not subsidise organisations involved in terrorism, child trafficking, and transgender procedures that are doing irreversible harm to children.” He added that the Department would apply the rule neutrally, without regard to ideology or mission.
Concerns for public sector workers
The states argue that the Education Department has introduced overly broad terms such as “substantial illegal purpose,” potentially excluding entire sectors like schools, hospitals and local government agencies from PSLF eligibility. They contend Congress never authorised such discretion and that the change violates the intent of the 2007 law.
Since its creation, the PSLF programme has cancelled student loans for over one million Americans, including teachers, nurses, firefighters and public defenders. Critics of the new rule warn that its implementation could jeopardise loan relief for thousands of students and educators across the US.
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