Suit Seeks to Halt Radical PSLF Rewrite in United Front Against Department of Education’s Unconstitutional Attack on Teachers, Nurses, First Responders, and Advocates

November 3, 2025 | BOSTON — A broad coalition of over a dozen cities, labor unions, and nonprofit organizations filed a lawsuit today against the U.S. Department of Education (ED). The suit charges the Trump-Vance Administration with illegally hijacking the Public Service Loan Forgiveness (PSLF) program to silence governments and nonprofit organizations that do work the Administration doesn’t like. The Administration’s action breaks a decades-old bipartisan Congressional promise to support those who choose to dedicate their careers to public service. 

Plaintiffs include City of Albuquerque, City of Boston, City of Chicago, City and County of San Francisco, County of Santa Clara, Amica Center for Immigrant Rights, Coalition for Humane Immigrant Rights, Legal Aid DC, National Association of Social Workers, National Council of Nonprofits, Oasis Legal Services, AFT, American Federation of State, County, and Municipal Employees, and National Education Association. The coalition is represented by Protect Borrowers and Democracy Forward in this matter; the County of Santa Clara and City and County of San Francisco represent themselves.

Public service employers and organizations representing public service workers warn that any effort to weaponize PSLF will have a chilling effect on the entire public service workforce. For example, cities across the nation employ teachers, firefighters, social workers, and healthcare workers who risk losing access to debt relief should the Trump-Vance Administration seek to punish their city for policies they do not like.

A copy of the lawsuit, captioned National Council of Nonprofits et al. v. McMahon, is available here.

A Spanish translation of this press release is available here.

Quotes from plaintiffs are available here.

“ED’s PSLF rule is an illegal attempt to weaponize the federal government against its own people,” said Persis Yu, Deputy Executive Director and Managing Counsel at Protect Borrowers. “The Trump-Vance Administration is telling a generation of dedicated public servants that their work only counts if it aligns with a MAGA political agenda. This betrays the nonpartisan promise of PSLF and the core principles of our nation. They are silencing dissent and trying to dismantle the very institutions that hold power accountable. We will not let this stand.”

“This administration has, yet again, unlawfully targeted people and communities because he doesn’t like where they work, or what they work on behalf of. And, yet again, we are taking him to court on behalf of a broad coalition of nonprofit organizations, communities, and unions, representing public servants who work every day in service to their community,” said Skye Perryman, President and CEO of Democracy Forward. “Our democracy relies on a government that makes decisions based on the law, not politically-driven retaliation. We are honored to represent this powerful coalition.”

The new PSLF rule would allow the Secretary of Education to disqualify government and nonprofit employers that disagree with the Trump-Vance Administration’s policies from the PSLF program. This would give the Administration a tool to attack sanctuary jurisdictions, immigrant rights groups, healthcare providers that offer gender affirming care, and employers committed to equal opportunity employment. 

The lawsuit, filed in the U.S. District Court for the District of Massachusetts, alleges that the new PSLF rule is a blatant violation of the Higher Education Act (HEA) passed by Congress, which categorically provides that government and 501(c)(3) nonprofit employers are PSLF-eligible employers, and is an unconstitutional assault on the First Amendment rights of millions of public service workers. By denying debt relief to those employed at organizations the Administration dislikes—such as those providing legal services to immigrant or LGBTQIA+ communities, or organized labor in public sector fields—the rule will deprive government and nonprofit employers of highly-qualified individuals to do work benefitting those in need across the country.

The coalition is asking the courts to strike down the rule and safeguard the PSLF program as Congress intended: a bipartisan promise to those who choose to serve their communities, regardless of politics.

This legal action presents a comprehensive legal challenge to ED’s PSLF rule and would cover the waterfront of Americans whose livelihoods and rights are vulnerable under the new rule.

Further Reading

250+ organization letter to ED opposing ED’s Notice of Proposed Rulemaking to unlawfully change PSLF program: 250+ Organizations Representing Millions Demand That the Department of Education Halts Its Weaponization of PSLF

Statement on ED’s proposed language to implement Trump’s EO to exclude certain employers from the PSLF program: U.S. Department of Education’s Proposed PSLF Language Uplifts Thinly-Veiled Fascism

Blog on PSLF Neg Reg sessions: Sham PSLF Neg Reg: Harmful, Horrific, and Illegal 

186 organization letter to ED in response to ED’s notice about Negotiated Rulemaking to implement a Trump Executive Order: Hundreds of Democracy, Labor, and Civil Rights Organizations Warn Trump Education Officials: Do Not “Weaponize PSLF”

Advisory that includes borrower quote on ED’s first Negotiated Rulemaking (Neg Reg) hearing on PSLF rewrite: Borrowers and Advocates to Demand Protections for Millions at Neg Reg as ED Moves to Gut Affordable Student Loan Payments

Collection of borrower stories: Voices Behind the Student Debt Crisis

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About Protect Borrowers

Protect Borrowers (formerly Student Borrower Protection Center) is a nonprofit organization led by a team of experts, lawyers, and advocates fighting to build an economy where debt doesn’t limit opportunity. We investigate financial abuses, take predatory companies to court, and push for policies to protect working people from debt traps. We aim to deliver immediate relief to families while building power, driving systemic change, and fighting for racial and economic justice.

Learn more at protectborrowers.org or follow us on social @BorrowerJustice.

About Democracy Forward

Democracy Forward Foundation (Democracy Forward) is a national legal organization that advances democracy and social progress through litigation, policy, public education, and regulatory engagement. 

Learn more at democracyforward.org.