(Hartford, CT) — Attorney General William Tong and 21 other attorneys general today filed a lawsuit against the U.S. Department of Education (ED) for unlawfully restricting eligibility for the Public Service Loan Forgiveness (PSLF) program, which allows government and nonprofit employees to have their federal student loans forgiven after ten years of service. The attorneys general are challenging a new federal rule that would deem certain state and local governments or nonprofit organizations ineligible employers for PSLF if the federal government determines they have engaged in actions with a substantial illegal purpose – in practice, activities, or actions that are disfavored by the administration. The coalition argues that the sweeping new rule is unlawful and targeted to punish states and organizations that the administration does not like.
“Donald Trump and Linda McMahon want to impose an illegal MAGA litmus test on billions of dollars in loan forgiveness for public servants. Engage in protest? Loan forgiveness yanked. Care about immigrant families? No loan forgiveness for you. Believe in the promise of diversity or support LGBTQ+ kids? Yanked. These are teachers, nurses, police officers, firefighters, and others on the front lines of our communities who would have the promise of aid reversed after years of following the rules and doing the right thing. This is cruel, this is wrong, this is against the law, and we’re suing to stop it,” said Attorney General Tong.
“This unnecessary punitive rule is cruel and misguided— favoring loyalty to Trump over hard work and dedication to public service. We must keep our promises to Connecticut teachers, police officers, and other public servants who have earned loan forgiveness through years of sacrifice and caring for people,” said U.S. Senator Richard Blumenthal.
“No one should be faced with a lifetime of debt because they decide to pursue a higher education. Democrats and Republicans came together to create the Public Service Loan Forgiveness program in Congress, to help make college more affordable and encourage young people to give back when they graduate. Our troops, teachers, and first responders shouldn’t have the aid they were promised put at risk because Donald Trump wants to make a political point. Connecticut won’t stand by and let this president weaponize every lever of power to silence dissent. I am proud to stand with Attorney General William Tong to challenge this cruel and illegal plan to bully our public servants into going along with the MAGA agenda,” said Congressman John Larson.
“PSLF has been bipartisan from the start when Congress created the program and President Bush signed it into law in 2007. Now, President Trump and Secretary of Education McMahon are redefining which public service jobs are eligible for PSLF based on the Administration’s own politics,” Congressman Joe Courtney said. “My office has heard from many people in public service professions who worked hard, followed the rules, but were still denied PSLF relief they were promised due to a lack of guidance and clarity from the Department of Education. Politicizing PSLF eligibility will throw public servants into even greater uncertainty and harm organizations that are filling critical service gaps in our communities. It also undermines Congressional intent and our promise to nurses, teachers, firefighters, and more public servants. I’ve led a coalition of my colleagues in opposition to politicizing PSLF, and I will continue fighting to make PSLF more transparent, fairer, and easier for America’s public service workers.”
“The Public Service Loan Forgiveness Program, also known as PSLF, rewards firefighters, nurses, educators, law enforcement officers, and people who work at organizations serving our communities,” said Congresswoman Rosa DeLauro. “To qualify, borrowers must work at least ten years in a public service-oriented role, full time, while making regular payments on their loans. PSLF is not a handout – but a thank you to those Americans who dedicate their lives to public service when they could choose more lucrative careers in the private sector. These are working and middle-class Americans who keep our communities running. Instead of fighting to lower their costs and make life more affordable, the Trump administration has once again chosen to leave these Americans behind while the wealthy continue to get ahead. He is weaponizing the PSLF program to silence dissent and consolidate his power. This is unacceptable and illegal – I am grateful for Connecticut Attorney General William Tong for taking the fight to court to protect this program for public servants.”
“If nonprofits can’t attract and retain quality employees, they can’t provide services on which people depend. The Public Service Loan Forgiveness program is one way to help them stay and to send a message that they are appreciated, that their decision to serve others rather than chase personal profit is a choice our society values. No matter the rationale, depriving organizations of eligibility will hurt them, and it would send them a message that they are just cannon fodder in battles over social issues. We appreciate AG Tong’s and his colleagues’ fight for them,” said Gian-Carl Casa, President & CEO of the CT Community Nonprofit Alliance.
“Educators dedicate their lives to serving students, strengthening communities, and shaping the future of our nation—often while not receiving a competitive salary and carrying a heavy burden of student debt. Student loan forgiveness is a promise made to those who choose to work as educators, medical professionals, and in other public service careers. The new rules restricting loan forgiveness are unfair and just another attempt to penalize educators and other public servants. We stand together to fight this illegal federal overreach. Educators deserve respect, relief, and the ability to teach freely—without political interference or financial punishment,” said Connecticut Education Association President Kate Dias.
“Arbitrarily excluding employers will hurt borrowers actively participating in PSLF, including teachers, nurses, first-responders, and employees of not-for-profit organizations who will now be left to wonder whether their years of service will count towards loan forgiveness,” said Michelle Jarvis-Lettman, Connecticut Student Loan Ombudsperson.
The PSLF program was established by Congress in 2007 to provide financial incentives to those who dedicate their careers to the service of others. The program forgives borrowers’ remaining federal student loan debt after ten years of qualifying public service and consistent payments. Over the years, PSLF has enabled more than one million public servants to pursue careers that might have otherwise been out of reach. For state governments, PSLF is a critical tool to recruit and retain qualified professionals in vital fields like education, health care, and law enforcement. According to the Connecticut Student Loan Ombudsperson and based on information provided by the U.S. Department of Education in July, 11,840 Connecticut borrowers have had their loans forgiven through PSLF. As of July, there were an additional 12,500 borrowers enrolled.
On October 31, ED finalized a new rule granting itself the power to unilaterally declare entire agencies or organizations ineligible employers for PSLF if the administration determines they have a “substantial illegal purpose.” The rule includes only a very limited definition of such “illegality,” which includes activities that support undocumented immigrants, provide gender-affirming health care to transgender youth, promote diversity, equity, and inclusion efforts, and engage in political protest. The rule is scheduled to take effect in July 2026.
Attorney General Tong and the coalition warn that this vague new authority could have devastating consequences nationwide. Countless public workers could suddenly lose PSLF eligibility through no fault of their own. States could be forced to confront severe staffing shortages, higher turnover, and skyrocketing costs to maintain essential services.
The coalition’s lawsuit argues that ED’s new rule is flatly illegal. The PSLF statute guarantees loan forgiveness for anyone who works full-time in qualifying public service; it does not grant ED discretion to carve out exceptions based on ideology. They assert that the rule’s vague “substantial illegal purpose” standard is arbitrary and capricious as it gives the Department unfettered power to target specific state policies or social programs while exempting federal agencies from scrutiny.
The attorneys general are asking the court to declare the rule unlawful, vacate it, and bar the Department of Education from enforcing or implementing it.
Joining Attorney General Tong in filing this lawsuit, which was led by the attorneys general of New York, Massachusetts, California, and Colorado, are the attorneys general of Arizona, Delaware, Hawaii, Illinois, Maine, Maryland, Michigan, Minnesota, Nevada, New Jersey, New Mexico, Oregon, Rhode Island, Vermont, Washington, Wisconsin, and the District of Columbia. A group of private plaintiffs and local governments is also filing a lawsuit today to block the implementation of the new rule.
