The complaint claims the rule is “an attempt to target organizations and jurisdictions whose missions and policies are inconsistent with (the Trump administration’s) policy positions on immigration, race, gender, free speech and public protest.”
“Politically motivated retaliation like what the administration did here should have no place in America,” said Sky Perryman, president and CEO of Democracy Forward, one of the organizations representing the plaintiffs.
The group of plaintiffs also includes the National Council of Non-Governmental Organizations, which it said in a statement when running the rule:
“Nonprofits operate food banks, serve veterans, help survivors of domestic violence, deliver food to the elderly, respond to disasters and much more. Nonprofits must be able to identify and meet these needs without political interference, fear of retribution or exclusion from a program designed to support their employees.”
Deputy Education Secretary Nicholas Kent condemned the legal action.
“It is unconscionable for plaintiffs to advocate criminal activity,” Kent said in a statement to NPR. “This is common sense reform that will stop 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 the 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 population it serves.”
The complaint said the 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 “will likely create an unsustainable staffing crisis.”
In a statement, Boston Mayor Michelle Wu added, “The city joins 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?
One key question raised by this rule change and the court case is: How will the Department of Education define activities with a “substantial unlawful purpose”?
According to the rule itself, such activities may include:
- “aiding and abetting violations of federal immigration laws”
- “supporting terrorism or engaging in violence to obstruct or influence federal government policy”
- “engaging in the chemical and surgical castration or mutilation of children in violation of federal or state law”
- “participating in the trafficking of children to another state for the purpose of emancipation from their legal parents in violation of federal or state law”
- “participating in a pattern of aiding and abetting unlawful discrimination”
- “and engaging in a pattern of violating state laws.”
If the Secretary finds that an employer has acted with a “substantial unlawful purpose,” according to the rule, the employer can either engage with the department and adopt a corrective action plan or risk losing access to PSLF for its employees for 10 years.
In response to public comments, the Ministry of Education has said“(It) would have no basis to disqualify nonprofits engaged in work related to immigrant communities, LGBTQ+ individuals, or racial justice if those organizations comply with the law.”
But the plaintiffs’ cities found the US Department of Justice “jurisdictions of asylum” list, say the Trump administration has already accused them of obstructing the enforcement of federal law and that the rule “represents another attack on politically unfavorable local governments and nonprofits that have local laws, policies and missions that are anathema to the administration.”
“The actions of these cities are legal,” said Persis Yu of Protect Borrowers, another organization representing the plaintiffs. What’s more, she says, “whether or not these activities are legal is not (a determination) that the secretary of education has either the right or the expertise to make.”
The new rule is the culmination of presidential actionissued in March in which President Trump accused the Biden administration of abusing PSLF and said the program “has misdirected tax dollars to 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 qualified as a “public service” when it wrote the law, and that this new rule contradicts the legislators’ intent.
“The Higher Education Act defines public service jobs as including government or tax-exempt 501(c)(3) nonprofit organizations. It doesn’t provide any discretion or wiggle room within that definition,” says Yu. “Congress said that’s the person who’s eligible for public service loan forgiveness. The secretary doesn’t have the power to change that.”
In response to public comments, the Ministry of Education has disagreewriting that “(he) rejects the suggestion that this rule exceeds its statutory authority. (The Higher Education Act) provides the Secretary with express authority to regulate title IV programs. PSLF is a title IV program, and its proper administration requires clear, 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 worried that their state employees could also be denied loan forgiveness because of state leaders’ decisions to support immigrants, encourage 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 in 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 service employees have so far paid off their federal student loan debt under PSLF.
