New Education Department Rule Faces Legal Challenges Over Political Concerns
A recently finalized rule from the Department of Education regarding the Public Service Loan Forgiveness (PSLF) program is drawing sharp criticism and legal challenges, with opponents alleging it injects political considerations into a previously bipartisan program. The rule allows the Secretary of Education to disqualify employers – including government and nonprofit organizations – from PSLF participation if they disagree with the governance’s agenda.
Ranking Member of the House Education and Workforce Committee expressed concern that the rule “opens the door for all kinds of mischief,” suggesting loan forgiveness could become contingent on alignment with the administration’s political views. He warned that organizations promoting civil rights could be negatively impacted.
Several organizations echoed these concerns. Jaylon Herbin, director of federal policy at the Center for responsible Lending (CRL), called the rule “the latest in a long list of cruel tricks” targeting groups and individuals with differing viewpoints. CRL previously warned in a September 17th letter to the Department of Education that the proposal would disproportionately harm communities already burdened by student debt, including Black and Brown borrowers, women, and first-generation college graduates. They argued the ambiguous eligibility rules could discourage public service and undermine civic participation.
Diane Yentel, president and CEO of the National Council of Nonprofits, stated the rule “unlawfully undermines and politicizes” the PSLF program, ultimately harming the millions who rely on nonprofits for essential services. The student Borrower Protection Center and Democracy Forward jointly asserted the rule represents an “unconstitutional power grab” attempting to punish those with opposing political views, and vowed legal action.
That legal action materialized on November 3rd,with two separate lawsuits filed challenging the rule. Massachusetts attorney General Andrea Joy Campbell,joined by 21 other state attorneys general,filed a lawsuit seeking to vacate the rule and prevent its enforcement. Concurrently, a coalition of cities, labor unions, and nonprofit organizations, represented by Democracy Forward and Protect borrowers, filed a lawsuit arguing the new eligibility requirements exceed the Education secretary’s authority under the Higher Education Act.
The controversy centers on the potential for the administration to leverage the PSLF program to influence the political alignment of participating organizations, raising concerns about the program’s integrity and its intended purpose of supporting public service.
