Broad Coalition of Nonprofit Organizations, Local Governments, and Labor Unions Successfully Stop Unlawful Effort to Punish Perceived Political Opponents

October 22, 2026 | BOSTON, MA — The Trump-Vance administration has abandoned its appeal in National Council of Nonprofits et al. v. McMahon, a case brought by a broad coalition of nonprofit organizations, more than a dozen local governments, and labor unions against the U.S. Department of Education. The case stopped a new rule that would have allowed the Secretary of Education to disqualify government and nonprofit employers that disagree with the administration’s policies from a program intended to support borrowers working in public service jobs.

Earlier this year, a federal court ordered the Trump-Vance administration to stop its unlawful rewriting of the Public Service Loan Forgiveness (PSLF) program as a way of silencing nonprofit organizations and local governments that do work that runs counter to the administration’s political agenda. The government had filed an appeal of the ruling, but on Wednesday submitted a joint stipulation of dismissal, which will formally end the matter and ensure the new rule will never take effect. 

Plaintiffs in the case 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, American Federation of Teachers, American Federation of State, County and Municipal Employees (AFSCME), and National Education Association. The coalition is represented by Democracy Forward and Protect Borrowers in this matter; the County of Santa Clara and City and County of San Francisco represent themselves.

Quotes from plaintiffs included in the coalition about the court’s ruling are available here. 

The legal team on this case includes Sarah Goetz, Victoria Nugent, Simon Brewer, Jennifer Fountain Connolly, and Robin Thurston from Democracy Forward, Persis Yu and Winston Berkman-Breen from Protect Borrowers, and attorneys from the County of Santa Clara Office of the County Counsel and San Francisco City Attorney’s Office.  

Read the opinion that decided the case here and learn more about the case here.

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About Democracy Forward

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

For more information, please visit www.democracyforward.org.

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.