A new battle over student loans is underway after the Trump administration changed a popular repayment plan that opponents say will give the Education Department the ability to deny relief to its political opponents.
The department said it will modify the Public Service Loan Forgiveness (PSLF) program, a repayment plan for government employees or nonprofit employees that allows full loan forgiveness after ten years of payments to be denied involved in “unlawful activities.”
But after “unlawful activities” were defined to include those engaged in transgender care and some immigration services, two lawsuits have been filed and advocates are preparing for a fight.
“I think it’s quite concerning. I think it opens up far too much and too great a possibility that employers will be targeted based on their policies or ideology to exclude their employees from PSLF,” said Neil McCluskey, director of the Center for Educational Freedom at the CATO Institute.
“I think we need to particularly look at the idea that the Secretary of Education just needs a lot of evidence to decide that some employers are doing things that are broadly illegal, and then he can stop them. And so it seems to me that there is far too much leeway that employers who are opposed by everyone in the White House, but in this case by the Trump administration, could lose that PSLF eligibility,” he added.
However, the PSLF rule is scheduled to take effect next July the complaining couple The motion filed Monday hopes to halt the effort.
One was filed by nearly two dozen Democratic states that argue the policy could affect teachers who utilize “inclusive” curricula, immigration lawyers and health workers who provide transgender care.
The other lawsuit was filed by advocacy groups, teachers unions and local cities, arguing that the policy violated higher education law.
“This administration has once again unlawfully targeted individuals working in the public interest. And so we are on trial again,” said Skye Perryman, President and CEO of Democracy Forward. “Politically motivated retaliation like the administration has carried out here should have no place in America. We are honored to represent this powerful coalition in defense of the people’s rights.”
The Trump administration has made a point of using schools, particularly colleges and universities, to advance its other political goals and to persecute political opponents.
A lot of international students and faculty were present Arrested earlier this year and are now fighting deportation after being targeted for their involvement in the pro-Palestinian movement.
And the Department of Education is Withdraw money from K-12 districts that are failing to meet calls to change their policies so that transgender students are not allowed to utilize the restrooms or participate in the sports teams of their choice, a demand also being made at colleges.
“I think it’s just … continued attempts by this government to push the boundaries of what it can and can’t do in terms of existing laws,” said Alex Lundrigan, policy and advocacy manager at Young Invincibles.
“The rule must be repealed because firstly it is illegal for several reasons and secondly it is directly harmful. The ministry must rescind the role,” he added. “I think in general that’s what people expect with regards to the Trump administration: that if he violates the law or the statute that was written and passed by Congress, there will be a proper oversight.”
This is just that Last fight This is a challenge for student loan advocates because Republicans have decided in this year’s “big, beautiful bill” to reduce the number of repayment options and limit the amount of loans students can take out in certain programs.
The Department of Education argues that its new rule will be enforced neutrally across all nonprofits eligible for PSLF.
“It is unconscionable for plaintiffs to engage in criminal activity,” Assistant Secretary of Education Nicholas Kent said in a statement. “This is common-sense reform that will prevent taxpayer dollars from subsidizing organizations involved in terrorism, child trafficking and transgender practices that cause irreversible harm to children.”
“The final rule is crystal clear: The Department will enforce it neutrally, without regard to the employer’s mission, ideology or population it serves,” Kent added.
Advocates say if a truly criminal employer were targeted, that would be one thing. However, they note that providing transgender care or fighting for immigrant rights does not necessarily violate the law.
“You could say that if an employer were found guilty in court of primarily supporting illegal things, you could say that they could be fired. But that’s not the standard they’re using here,” McCluskey said.
