Cities, Unions, Civil Society Organizations Sue Trump-Vance Administration for Weaponizing Public Service Loan Forgiveness to Silence Critics and Stifle Dissent
Suit Seeks to Halt Radical PSLF Rewrite in United Front Against Department of Education’s Unconstitutional Attack on Teachers, Nurses, First Responders, and Advocates
November 3, 2025 | BOSTON — AFSCME, alongside a broad coalition of over a dozen cities, labor unions, and nonprofit organizations filed a lawsuit today against the U.S. Department of Education (ED). The suit charges the Trump-Vance Administration with illegally hijacking the Public Service Loan Forgiveness (PSLF) program to silence governments and nonprofit organizations that do work the Administration doesn’t like. The Administration’s action breaks a decades-old bipartisan Congressional promise to support those who choose to dedicate their careers to public service.
Plaintiffs include City of Albuquerque, City of Boston, City of Chicago, City and County of San Francisco, County of Santa Clara, Amica Center for Immigrant Rights, Coalition for Humane Immigrant Rights, Legal Aid DC, National Association of Social Workers, National Council of Nonprofits, Oasis Legal Services, American Federation of Teachers, American Federation of State, County and Municipal Employees, and National Education Association. The coalition is represented by Protect Borrowers and Democracy Forward in this matter; the County of Santa Clara and City and County of San Francisco represent themselves.
Public service employers and organizations representing public service workers warn that any effort to weaponize PSLF will have a chilling effect on the entire public service workforce. For example, cities across the nation employ teachers, firefighters, social workers, and healthcare workers who risk losing access to debt relief should the Trump-Vance Administration seek to punish their city for policies they do not like.
“The Public Service Loan Forgiveness program allows nurses, first responders, corrections officers, school staff and more to support their families while serving their communities,” said AFSCME President Lee Saunders. “Gutting this program will worsen the public service staffing crisis while weakening the essential services communities rely on. We’re filing this lawsuit to protect the Public Service Loan Forgiveness program so working people can continue to afford to serve their communities in the jobs they love.”
“This administration has, yet again, unlawfully targeted people who work in the public interest. And so we again are in court,” said Skye Perryman, President and CEO of Democracy Forward. “Politically motivated retaliation, like what the administration has done here, should have no place in America. We are honored to represent this powerful coalition in defense of the people’s rights.”
“ED’s PSLF rule is an illegal attempt to weaponize the federal government against its own people,” said Persis Yu, Deputy Executive Director and Managing Counsel at Protect Borrowers. “The Trump-Vance Administration is telling a generation of dedicated public servants that their work only counts if it aligns with a MAGA political agenda. This betrays the nonpartisan promise of PSLF and the core principles of our nation. They are silencing dissent and trying to dismantle the very institutions that hold power accountable. We will not let this stand.”
Quotes from co- plaintiffs available here.
A copy of the lawsuit, National Council of Nonprofits et al. v. McMahon, is available here.
The new PSLF rule would allow the Secretary of Education to disqualify government and nonprofit employers that disagree with the Trump-Vance Administration’s policies from the PSLF program. This would give the Administration a tool to attack sanctuary jurisdictions, immigrant rights groups, healthcare providers that offer gender affirming care, schools, colleges, and universities, and employers committed to equal opportunity employment.
The lawsuit, filed in the U.S. District Court for the District of Massachusetts, alleges that the new PSLF rule is a blatant violation of the Higher Education Act (HEA) passed by Congress, which categorically provides that government and 501(c)(3) nonprofit employers are PSLF-eligible employers, and is an unconstitutional assault on the First Amendment rights of millions of public service workers. By denying debt relief to those employed at organizations the Administration dislikes—such as those providing legal services to immigrant or LGBTQIA+ communities—the rule will deprive government and nonprofit employers of highly-qualified individuals to do work benefitting those in need across the country.
The coalition is asking the courts to strike down the rule and safeguard the PSLF program as Congress intended: a bipartisan promise to those who choose to serve their communities, regardless of politics.
This legal action presents a comprehensive legal challenge to ED’s PSLF rule and would cover the waterfront of Americans whose livelihoods and rights are vulnerable under the new rule.