The complaint claims the rule is “an attempt to target organizations and jurisdictions whose missions and policies do not align with (the Trump administration’s) policy positions on immigration, race, gender, free speech, and public protest.”
“Politically motivated retaliation, like what the administration has done here, should have no place in America,” said Skye Perryman, president and CEO of Democracy Forward, one of the organizations representing the plaintiffs.
The group of plaintiffs also includes the National Council of Nonprofits, which said in a statement when the rule was issued:
“Nonprofits operate food banks, serve veterans, help survivors of domestic violence, deliver meals to seniors, respond to disasters and much more. Nonprofits must be able to identify and meet these needs without political interference, fear of retaliation, or exclusion from a program designed to support their employees.”
Undersecretary of Education Nicholas Kent denounced the lawsuit.
“It is unconscionable that the plaintiffs are defending 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 cause irreversible harm to children. »
In response to plaintiffs’ concerns that the administration could use PSLF as a weapon to punish political opponents, Kent insisted that “the Department will apply (the rule) neutrally, without regard to the employer’s mission, ideology, or the population it serves.”
The complaint says PSLF 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 untenable staffing crisis.”
In a statement, Boston Mayor Michelle Wu added: “The city is partnering with cities, unions and nonprofits across the country to protect a program that helps Boston’s workforce and millions of Americans in public service pay for college.
What activities does the administration consider illegal?
A key question raised by this rule change and the lawsuit is: How will the Department of Education define activities with a “significant illegal purpose”?
Depending on the rule itself, these activities could include:
- “aiding and abetting violations of federal immigration laws”
- “support terrorism or engage in violence with the intent to obstruct or influence the policy of the federal government”
- “engaging in the chemical and surgical castration or mutilation of children in violation of federal or state law”
- “engaging in the trafficking of children to another state for the purpose of emancipation from their lawful parents, in violation of federal or state law”
- “engaging in a system of aiding and abetting unlawful discrimination”
- “and engage in a pattern of violating state laws.” »
If the Secretary determines that an employer has behaved for a “significant unlawful purpose,” according to the rule, the employer can either engage with 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 stated, “[t]here would be no reason to remove eligibility from nonprofit organizations engaged in work related to immigrant communities, LGBTQ+ individuals, or racial justice if those organizations are following the law.” »
But the plaintiff cities, which are on the U.S. Justice Department’s list of “sanctuary jurisdictions,” say the Trump administration has already accused them of obstructing federal law enforcement, and that this rule “represents a new attack on politically disadvantaged local governments and nonprofits whose local laws, policies and missions are anathema to the administration.”
“These cities’ actions are legal,” said Persis Yu of Protect Borrowers, another organization representing the plaintiffs. Additionally, she said, “whether these activities are legal or not is not a (determination) that the Secretary of Education has the right or expertise to make.” »
The new rule is the culmination of a presidential action, issued in March, in which President Trump accused the Biden administration of abusing PSLF and said the program “has diverted taxpayer dollars to activist organizations that not only fail to serve the public interest, but actually harm our national security and American values, sometimes through criminal means.”
What was Congress’s intention in creating the PSLF?
The plaintiffs argue that Congress was clear about what should be considered a “public service” when it wrote the law, and that this new rule goes against lawmakers’ intent.
“The Higher Education Act defines public service employment to include government or a 501(c)(3) tax-exempt nonprofit organization. It provides no discretion or wiggle room in that definition,” says Yu. “Congress has said that it is the right to have public service loans forgiven. The secretary has no authority to change that.”
In response to public comments, the Department of Education disagreed, writing that “(it) rejects the suggestion that this rule exceeds its statutory authority. The (Higher Education Act) grants the Secretary explicit authority to regulate Title IV programs. PSLF is a Title IV program, and its proper administration requires clear and enforceable standards.”
Another lawsuit was filed in tandem Monday, by a coalition of 21 state attorneys general, arguing on behalf of Democratic-leaning state governments who fear their public employees may 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 press release that the rule would lead to “widespread confusion, fear, and instability among the public workforce, forcing states to face severe staffing shortages, higher turnover, and skyrocketing costs to maintain essential services.”
According to federal data, more than 1.1 million public employees have so far had their federal student loan debts forgiven under PSLF.
