Washington Attorney General Nick Brown, along with 21 other states, has filed a lawsuit against the U.S. Department of Education, challenging a new rule that restricts eligibility for the Public Service Loan Forgiveness (PSLF) program.
The lawsuit targets a rule that will allow the department to declare certain state and local governments or nonprofit organizations ineligible for PSLF if they are deemed to have a ‘substantial illegal purpose," according to a release from AG Brown’s office.
“The PSLF program helps people afford to pursue public service careers without the weight of crushing debt of college or graduate school loans,” AG Brown said. “Giving back to the community is a good thing that should be encouraged.”
The PSLF program, established by Congress in 2007, aims to forgive federal student loan debt for borrowers who work in public service for ten years and make consistent payments.
Officials say it has been an important tool for recruiting professionals in education, healthcare, and law enforcement.
AG Brown says the new rule’s definition of ‘substantial illegal purpose’ includes activities like supporting undocumented immigrants, providing gender-affirming health care to transgender youth, promoting diversity, equity, and inclusion efforts, and engaging in political protest.
The attorneys general warn that it could lead to staffing shortages and increased costs for essential services.
The Department of Education estimates that the rule will result in over $1.5 billion in additional payments from borrowers who would lose PSLF eligibility.
In Washington alone, more than 23,000 borrowers had $1.62 million in loans approved for discharge under the program between October 2021 and January 2025, AG Brown’s office said.
The coalition’s lawsuit seeks to have the rule declared illegal and unenforceable, arguing that it exceeds the Department of Education’s authority under the PSLF statute.
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