A coalition of more than twenty states, including Maine, have sued the Trump Administration over its decision to disqualify some nonprofit and public sector workers from a federal student loan forgiveness program because their employers may be involved in illegal activity as determined by the Department of Education (DOE).
In keeping with an Executive Order issued by President Donald Trump (R) in March, the DOE adopted new rules outlining a series of activities that are defined as having a “substantial illegal purpose.”
Some of the new restrictions are centered on key issues such as immigration and terrorism, while others more broadly bar those whose employers are found to have engaged in a pattern of illegal discrimination or have a history of violating state laws.
Blocked as well would be individuals employed by organizations who participate in the “chemical and surgical castration or mutilation of children,” which is defined as the provision of puberty blockers, sex hormones, or surgical procedures for the purpose of altering one’s appearance to match that of a gender different from their biological sex.
According to the official fact sheet shared by the DOE, not all organizations that have previously broken the law will be deemed to have a “substantial illegal purpose.” Rather, the Secretary of Education will weigh if such actions are “severe or pervasive in the organization,” comprising “more than an insubstantial amount of its activities.”
It is noted that determinations of what is considered to meet this threshold would be based on “uniform criteria” and evaluated on a case-specific basis.
As currently written, these changes are slated to go into effect next year on July 1.
“The revisions strengthen accountability, enhance program integrity, and protect hardworking taxpayers from shouldering the cost of improper subsidies granted to employees of organizations that undermine national security and American values through criminal activity,” explains the official summary of these changes.
This sentiment largely echoes the President’s words in the Executive Order issued earlier this year in which the DOE was directed to consider such amendments.
“Instead of alleviating worker shortages in necessary occupations, the PSLF Program has misdirected tax dollars into activist organizations that not only fail to serve the public interest, but actually harm our national security and American values, sometimes through criminal means,” President Trump said at the time.
Critics, however, have suggested that the new guidelines are unlawful, discriminatory and politically motivated.
For example, New York Attorney General Letitia James has called the rule “a political loyalty test disguised as a regulation,” adding that it’s “unjust and unlawful to cut off loan forgiveness for hardworking Americans based on ideology.”
The Public Service Loan Forgiveness (PSLF) program was first established by Congress in 2007 through the College Cost Reduction and Access Act while George W. Bush was serving as president.
According to the Consumer Financial Protection Bureau (CFPB), those working for qualified public service employers and have made 120 qualifying monthly payments on their student loans are eligible to have their federal student loans forgiven.
The lawsuit challenging the new rules for the program argues that Congress did not authorize the DOE to make such changes to the eligibility requirements for receiving PSLF benefits.
“Congress spoke clearly: all government jobs are PSLF-eligible, with the sole exception of elected members of Congress themselves,” the states claimed in their filing. “Defendants’ Rule unlawfully creates additional exceptions to that straightforward statutory definition, contrary to the PSLF Statute’s plain terms and in excess of the Department’s authority.”
“The Public Service Loan Forgiveness program is a Bush-era, bipartisan-backed effort that encourages generations of young people to build careers in public service,” California Attorney General Rob Bonta said in a statement. “Make no mistake: This is the latest example of the Trump Administration’s weaponization of the federal government to go after people it does not agree with, all the while betraying and eroding the very institutions that uphold our democracy.”
Under Secretary of Education Nicholas Kent has pushed back on these accusations in a recently released statement, according to reporting from The Hill.
“It is unconscionable that the plaintiffs are standing up for criminal activity,” Under Secretary Kent said. “This is a commonsense reform that will stop taxpayer dollars from subsidizing organizations involved in terrorism, child trafficking, and transgender procedures that are doing irreversible harm to children.”
Aside from Maine, states participating in this lawsuit include New York, Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, Oregon, Rhode Island, Vermont, Washington, and Wisconsin, as well as Washington DC.
As of this article’s publication, Maine Attorney General Aaron Frey has not yet issued public remarks concerning the state’s involvement in this case.
