States sue Trump over new PSLF rule

New York Attorney General Letitia James and more than a dozen state attorneys general sued the Trump administration on Monday over its new rule limiting eligibility for the popular student loan forgiveness program.

AGs caseThe lawsuit, filed in Boston federal court, arose at the request of the US Department of Education. last rule It was published last week. The rule changes the definition of “qualified employer” under the Public Service Loan Forgiveness program to exclude certain organizations that “engage in illegal activities,” such as “supporting terrorism and aiding and abetting illegal immigration,” according to a statement from the Department of Education.

PSLF, signed into law by George W. Bush in 2007, offers borrowers who work for nonprofits and the government to have their debts erased after ten years.

“Public Service Loan Forgiveness was created as a promise to teachers, nurses, firefighters and social workers that their service to our communities will be honored,” Attorney General James said in a statement.

“Instead, this administration has created a political loyalty test under the guise of regulation,” James said.

Education Undersecretary Nicholas Kent called the rule “common-sense reform” in an email to CNBC.

More than 40 million Americans have student loans, with outstanding debt exceeding $1.6 trillion. More than 9 million debtors May qualify for PSLFThat’s according to a 2022 forecast from Protect Borrowers, a nonprofit focused on student loans.

President Donald Trump has been a vocal critic of the Biden administration’s student loan forgiveness efforts, which include making it easier to qualify for PSLF. More than 1 million people under President Joe Biden Their debts were erased within the scope of the programAccording to the 2024 White House fact sheet.

The lawsuit was filed by the attorneys general of Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, Oregon, Rhode Island, Vermont, Washington, Wisconsin and the District of Columbia.

A coalition of cities, labor unions and nonprofits across the U.S. filed a lawsuit On Monday, he took on the Trump administration over the PSLF rule.

“The Trump Administration’s illegal actions threaten to make higher education even more expensive for Boston teachers, first responders, and civil servants,” Boston Mayor Michelle Wu said in a statement.