Overview
- The Education Department’s final rule, published last week, allows the secretary to disqualify government and 501(c)(3) employers deemed to have a “substantial illegal purpose,” citing examples such as aiding illegal immigration or providing gender-affirming care to minors.
- New York, California, Massachusetts and Colorado lead a coalition of 21 states plus Washington, D.C., while a separate case was filed by Boston, Chicago, San Francisco, Albuquerque, major teachers’ unions and nonprofits represented by Protect Borrowers and Democracy Forward.
- Both complaints argue the department exceeded Congress’s definition of qualifying employers in the Higher Education Act, rely on an impermissibly vague standard, and ask the court to vacate the rule and bar enforcement.
- Under Secretary of Education Nicholas Kent defends the regulation as a commonsense safeguard, saying it will be enforced neutrally and aims to prevent taxpayer subsidies for terrorism, child trafficking and certain medical procedures for minors.
- The plaintiffs warn the policy could chill recruitment and retention in public service and cause borrowers to lose PSLF eligibility through no fault of their own if their employers are disqualified.