Press Release: 11/3/2025

Cities, Workers, Civil Society Organizations Sue Trump-Vance Administration for Weaponizing Public Service Loan Forgiveness to Silence Critics and Stifle Dissent

 

PRESS RELEASE NOVEMBER 3, 2025 

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

Boston, Mass — 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 non-profit 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 Democracy Forward and Protect Borrowers 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.

Quotes from plaintiffs and co-counsel are available here.

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 non-profit 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.

The Democracy Forward legal team working on the case includes Sarah Goetz, Jennifer Connolly, and Victoria Nugent. 

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

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Democracy Forward Foundation 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.