Several attorneys general have collaborated to file a lawsuit against the Education Department over its decision to make a new rule for student loan forgiveness.
The change in question is requiring employers to "qualify" for the Public Service Loan Forgiveness Program (PSLF) by avoiding activities that are deemed to have "substantial illegal purpose."
New Student Loan Forgiveness Rule
The new rule was published on Friday and limits eligibility for PSLF, which forgives the remaining balance on federal student loans for eligible public service workers after 10 years. This change is part of the department's broader crackdown on what the Trump administration describes as "anti-American activists."
With the latest lawsuit against the Education Department, New York Attorney General Letitia James argues that the new rule is "flatly illegal." She added that it would basically transform PSLF into a political weapon against states and causes that the current administration does not like, as it allows the federal government to deem them to be "substantially illegal," according to Axios.
James noted that the law that created the PSLF guaranteed forgiveness to any individual who was working full-time in qualifying public service. She argued that the Education Department does not have the discretion to "carve out exceptions based on ideology."
On the other hand, Under Secretary of Education Nicholas Kent said that it is "unconscionable that the plaintiffs are standing up for criminal activity." He added that the change is a "commonsense reform" to stop taxpayer dollars from subsidizing organizations that are involved in terrorism, child trafficking, and transgender procedures.
Another lawsuit that was filed against the Education Department is being led by the National Council of Nonprofits, along with more than a dozen cities, labor unions, and nonprofit organizations, Politico reported.
Lawsuit Arguing Violation of the Higher Education Act
The legal challenge argues that the change violates the Higher Education Act, which states that government and 501(c)(3) nonprofit employers are PSLF-eligible. Additionally, the plaintiffs believe that the new rule violates the First Amendment rights of millions of public service workers.
The change comes as there is currently more than $1.6 trillion worth of student loan debt across the United States. This statistic has been steadily rising over the years, and roughly 52% of federal borrowers are on track to repay their loans within the next decade.
It is generally difficult for some individuals to handle their debt levels, forcing them to miss scheduled payments. This is particularly true for those who did not finish their degrees or who attended for-profit colleges, as per The Conversation.
