{"id":37633,"date":"2025-11-03T17:12:42","date_gmt":"2025-11-03T17:12:42","guid":{"rendered":"https:\/\/financialrush.com\/?p=37633"},"modified":"2025-11-03T17:12:42","modified_gmt":"2025-11-03T17:12:42","slug":"states-sue-trump-over-new-pslf-rule","status":"publish","type":"post","link":"https:\/\/financialrush.com\/?p=37633","title":{"rendered":"States sue Trump over new PSLF rule"},"content":{"rendered":"

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New York Attorney General Letitia James stands silently during a press conference on October 21, 2025 in New York City. <\/p>\n

Michael M. Santiago | Getty Images<\/p>\n<\/div>\n<\/div>\n<\/div>\n

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New York Attorney General Letitia James and more than a dozen other state attorneys general are suing the Trump administration over its new rule<\/a> limiting eligibility for a popular student loan<\/a> forgiveness program.<\/p>\n

The AGs\u2019 lawsuit<\/a> was prompted by the U.S. Department of Education\u2019s final rule<\/a>, released last week, that changes the definition of a \u201cqualifying employer\u201d under the Public Service Loan Forgiveness program. The rule excludes certain organizations \u201cthat engage in unlawful activities\u201d such as \u201csupporting terrorism and aiding and abetting illegal immigration,\u201d according to an Education Department statement.<\/p>\n

PSLF, signed into law in 2007 by George W. Bush,\u00a0offers debt cancellation<\/a>\u00a0after a decade to borrowers who work for non-profits and the government.<\/p>\n

\u201cPublic Service Loan Forgiveness was created as a promise to teachers, nurses, firefighters, and social workers that their service to our communities would be honored,\u201d said Attorney General James in a statement.<\/p>\n

\u201cInstead, this administration has created a political loyalty test disguised as a regulation,\u201d James said.<\/p>\n

The U.S. Department of Education did not immediately respond to a request for comment.<\/p>\n<\/div>\n

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Read more CNBC personal finance coverage<\/h2>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n
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More than 40 million Americans hold student loans, and the outstanding debt exceeds $1.6 trillion.\u00a0Over 9 million borrowers\u00a0may be eligible for PSLF<\/a>, according to a 2022 estimate from Protect Borrowers, a nonprofit focused on student loans.<\/p>\n

President Donald Trump has been a vocal critic of the Biden administration\u2019s student loan forgiveness efforts, which included making it easier to qualify for PSLF. Under President Joe Biden,\u00a0more than 1 million people had their debts cleared under the program<\/a>, according to a 2024 White House fact sheet.<\/p>\n

The lawsuit was brought by attorneys general of Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, Oregon, Rhode Island, Vermont, Washington, Wisconsin and the District of Columbia.<\/p>\n

A coalition of cities across the U.S, labor unions and nonprofit organizations also filed a lawsuit<\/a> on Monday against the Trump administration over its PSLF rule.<\/p>\n

\u201cThe Trump Administration\u2019s illegal actions threaten to make higher education even more expensive for Boston\u2019s teachers, first responders, and civil servants,\u201d said Boston Mayor Michelle Wu in a statement.<\/p>\n

This is breaking news. Please check back for updates.<\/strong><\/em><\/p>\n<\/div>\n<\/div>\n\n
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