Massachusetts Leads 22 States Suing Education Dept Over Public Service Loan Forgiveness Rule

A coalition of 22 Democrat-led states, led by attorneys general from New York, Massachusetts, California, Colorado, and Vermont, has filed multiple lawsuits against the Trump administration's new rules restricting eligibility for the Public Service Loan Forgiveness (PSLF) program. The new federal rule excludes certain state and local governments and nonprofits from eligibility if deemed to have a "substantial illegal purpose," targeting organizations that support undocumented immigrants, provide gender-affirming care to transgender youth, or engage in political protests. The states argue this is an unlawful political loyalty test that punishes public servants based on ideology and will worsen workforce shortages in critical public service sectors. The administration defends the rule as a necessary reform to prevent taxpayer funds from subsidizing organizations involved in criminal activities, including terrorism and child trafficking. Legal challenges also come from coalitions of cities, nonprofits, and labor groups emphasizing that the changes undermine a promise made to public servants and disrupt critical recruitment and retention efforts. The lawsuits seek to have the new rule declared unlawful and to block its enforcement, underscoring a deep partisan conflict over the future of the PSLF program.