Alleged politicization of public service student loan forgiveness sparks lawsuit against Trump administration

Sentinel

A coalition of over a dozen cities, unions, and nonprofits sued the Trump administration on Monday to block a new Education Department rule that excludes organizations from the Public Service Loan Forgiveness (PSLF) program if they engage in activities deemed unlawful, such as aiding immigration violations, illegal discrimination, or providing certain medical procedures to transgender youth. The rule, effective July 1, 2026, stems from a March executive order and allows the Education Secretary to remove noncompliant entities, which can respond, enter corrective plans, or reapply after 10 years. PSLF forgives federal student loans after 10 years of qualifying public service at government agencies or nonprofits. Plaintiffs, represented by Democracy Forward and Protect Borrowers, argue the rule politicizes PSLF, violates the First Amendment, and undermines its nonpartisan intent by targeting ideologically opposed work. Key plaintiffs include Chicago, the National Council of Nonprofits, and the American Federation of State, County and Municipal Employees. The administration defends it as protecting taxpayers from subsidizing illegal activities, amid efforts to halve the department's workforce.