A new legal battle has erupted over changes to the Public Service Loan Forgiveness (PSLF) program. Attorneys general from 21 Democratic states and Washington, D.C., along with two advocacy groups, have filed lawsuits against the U.S. Department of Education. Their goal is to block a recent rule introduced by the Trump administration that could restrict who qualifies for student loan forgiveness.

The PSLF program was designed to help teachers, firefighters, nurses, and other public servants by erasing their remaining student debt after ten years of qualifying payments. The new rule, however, changes who can access this relief, and that has sparked widespread concern.

The Controversial Rule

Under the updated regulation, individuals or organizations involved in what the administration calls “unlawful activities” would be excluded from loan forgiveness. The Education Department defines such activities as “abetting illegal immigration” or “supporting gender transition for minors.” The rule is scheduled to take effect in July next year.

The administration argues that this change will ensure taxpayer money is not used to fund groups engaged in activities it deems harmful or illegal. Yet critics say the language is vague and politically motivated.

States Push Back

The coalition of states argues that the rule unfairly targets public servants based on ideology rather than conduct. New York Attorney General Letitia James called the move a betrayal of the PSLF program’s purpose.

“Public Service Loan Forgiveness was created as a promise to teachers, nurses, firefighters, and social workers that their service to our communities would be honored,” James said. “Instead, this administration has created a political loyalty test disguised as a regulation.”

The attorneys general fear the rule could strip eligibility from professionals such as teachers in inclusive classrooms, healthcare workers providing gender-affirming care, and lawyers representing immigrants. They warn this could happen “through no fault of their own,” undermining public trust in the government’s loan programs.

The Administration’s Response

Under Secretary of Education Nicholas Kent defended the new policy. He called it a “commonsense reform” to prevent taxpayer dollars from subsidizing organizations involved in activities such as terrorism, human trafficking, or medical procedures on minors that the administration opposes.

Kent insisted that the rule would be enforced “neutrally, without consideration of an employer’s mission, ideology, or the population they serve.”

Broader Legal Challenge

Alongside the states’ lawsuit, two major advocacy groups, Protect Borrowers and Democracy Forward, have also filed a separate legal challenge. Joined by several cities and national teachers’ unions, they argue the rule violates the Higher Education Act and was issued without proper authority.

“This administration has, yet again, unlawfully targeted people who work in the public interest,” said Skye Perryman, president and CEO of Democracy Forward. “Politically motivated retaliation, like what the administration has done here, should have no place in America.”

What Comes Next

The lawsuits are expected to move quickly as the rule’s implementation date approaches. For now, the future of the PSLF program remains uncertain, caught between political divides and the lives of millions of public servants who depend on it.