Unions, Nonprofits and Cities Sue to Block Education Department’s New PSLF Employer Rule

Overview

• Multiple federal lawsuits filed in Massachusetts seek to vacate the Education Department’s rule narrowing which employers qualify for Public Service Loan Forgiveness.
• The latest complaint, brought by RFK Human Rights, the American Immigration Council, The Door, and LULAC, argues the regulation is vague, overbroad, and contrary to the PSLF statute.
• A separate suit backed by teacher unions, major nonprofits, and municipalities including Boston, Albuquerque, Chicago, and San Francisco challenges the rule’s legality and warns of recruitment harms.
• The Education Department defends the policy as a neutral safeguard against subsidizing criminal activity, with Under Secretary Nicholas Kent criticizing the plaintiffs’ position.
• The Center Square reported that 22 Democratic attorneys general led by California, Massachusetts, Colorado, and New York have also filed suit targeting the rule.