The complaint stated that the rule is “an attempt to target organizations and jurisdictions whose missions and policies do not align with [the Trump administration’s] political positions on immigration, race, gender, freedom of expression and public protest.”
“Politically motivated retaliation, like what the administration has done here, should have no place in the United States,” said Skye Perryman, president and CEO of Democracy Forward, one of the organizations representing the plaintiffs.
The plaintiff group also includes the National Council of Nonprofit Organizations, which said in a statement after publication of the rule:
“Nonprofits operate food banks, serve veterans, help domestic violence survivors, deliver meals to seniors, respond to disasters, and much more. Nonprofits must be able to identify and meet those needs without political interference, fear of retaliation, or exclusion from a program designed to support their employees.”
Undersecretary of Education Nicholas Kent denied the claim.
“It is unconscionable for plaintiffs to defend criminal activity,” Kent said in a statement to NPR. “This is a common-sense reform that will prevent taxpayer dollars from subsidizing organizations involved in terrorism, child trafficking and transgender procedures that are causing irreversible harm to children.”
In response to plaintiffs’ concerns that the administration could weaponize PSLF to punish its political opponents, Kent urged that “the Department will enforce the laws.” [the rule] neutrally, without considering the mission, ideology or the population the employer serves.”
The complaint says PSLF has allowed local governments to retain employees, including lawyers and engineers, who could earn more in the private sector. Albuquerque leaders say losing access to PSLF “would likely create an unsustainable staffing crisis.”
In a statement, Boston Mayor Michelle Wu added: “The city is joining cities, unions and nonprofits across the country to protect a program that helps Boston’s workforce and millions of Americans in public service careers pay for college.”
What activities does the administration consider illegal?
A key question that arises from this rule change and the lawsuit is: How will the Department of Education define activities with “substantial unlawful purposes”?
According to the standard itself, these activities could include:
- “aiding and abetting violations of federal immigration laws”
- “support terrorism or engage in acts of violence for the purpose of obstructing or influencing federal government policy”
- “engage in the chemical and surgical castration or mutilation of children in violation of federal or state law”
- “engage in the trafficking of children to another state for the purposes of emancipation of their legitimate parents in violation of federal or state law”
- “engaging in a pattern of aiding and abetting illegal discrimination”
- “and engage in a pattern of violating state laws.”
If the secretary determines that an employer has engaged in conduct for a “substantial unlawful purpose,” under the rule, the employer can contact the department and agree to a corrective action plan or risk losing access to PSLF for its employees for 10 years.
In response to public comments, the Department of Education has said“[it] “There would be no basis for eliminating the eligibility of nonprofits that do work related to immigrant communities, LGBTQ+ people, or racial justice if those organizations comply with the law.”
But the plaintiff cities, which are part of the list of the US Department of Justice. “sanctuary jurisdictions” list, they say that the Trump administration has already accused them of impeding the application of federal law, and that this rule “represents yet another attack on politically disadvantaged local governments and nonprofit organizations that have local laws, policies and missions that are anathema to the Administration.”
“The actions of these cities are legal,” says Persis Yu of Protect Borrowers, another organization representing the plaintiffs. Furthermore, he says, “whether these activities are legal or not is not a question.” [determination] that the secretary of education has the right or the experience to do so.”
The new rule is the culmination of a presidential actionissued in March, in which President Trump accused the Biden administration of abusing PSLF and said the program “has misdirected tax dollars toward activist organizations that not only do not serve the public interest, but actually harm our national security and American values, sometimes through criminal means.”
What did Congress intend when it created the PSLF?
The plaintiffs argue that Congress was clear about what should qualify as a “public service” when it wrote the law, and that this new rule goes against the politicians’ intent.
“The Higher Education Act defines public service jobs as those that include government or a 501(c)(3) tax-exempt nonprofit organization. It does not provide any discretion or leeway within that definition,” Yu says. “Congress has said this is the person who is entitled to public service loan forgiveness. The secretary does not have the authority to change that.”
In response to public comments, the Department of Education has disagreewriting that “[it] rejects the suggestion that this rule exceeds its legal authority. He [Higher Education Act] grants the Secretary explicit power to regulate title IV programs. “PSLF is a Title IV program and its proper administration requires clear and enforceable standards.”
On Monday, a coalition of 21 state attorneys general filed another lawsuit together, arguing on behalf of Democratic-leaning state governments that fear their public employees could also be denied loan forgiveness because of state leaders’ decisions to support immigrants, promote DEI or provide gender-affirming care.
The coalition of attorneys general warned in a news release that the rule would result in “widespread confusion, fear and instability in the public workforce, forcing states to face severe staffing shortages, increased turnover and skyrocketing costs to maintain essential services.”
According to federal data, PSLF has so far canceled the federal student loan debts of more than 1.1 million public service workers.
