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Massachusetts Attorney General Andrea Campbell sued the Trump administration on Monday with claims that the Department of Education has unlawfully restricted government and nonprofit employees from having their student loans forgiven after 10 years of service. Campbell and 21 other attorneys general filed the lawsuit, stating that the federal government is unlawfully restricting eligibility for the Public Service Loan Forgiveness program. The state officials are challenging a new federal rule that would deem certain state and local governments or nonprofit organizations ineligible employers for the Public Service Loan Forgiveness program. Under the new federal rule, the government could determine that agencies that have engaged in “activities or actions that are disfavored by the Administration” would make their employees ineligible for the loan forgiveness program, state officials said. The Trump administration announced its rule last week about its amendment of “qualifying employer” to exclude certain organizations. “Taxpayer funds should never directly or indirectly subsidize illegal activity. The Public Service Loan Forgiveness program was meant to support Americans who dedicate their careers to public service – not to subsidize organizations that violate the law, whether by harboring illegal immigrants or performing prohibited medical procedures that attempt to transition children away from their biological sex,” said Under Secretary of Education Nicholas Kent. Officials in many states, including Massachusetts, are pushing back on the administration’s decision. “The coalition argues that the sweeping new rule is unlawful and targeted to punish states and organizations that the Administration does not like,” a press release about the lawsuit states. “For decades, the Public Service Loan Forgiveness program has enabled talented, service-minded individuals to build careers helping others – with the promise that their sacrifice would be honored with loan forgiveness. By changing the rules and punishing the very people who keep our communities running, the Trump Administration has shown once again that it chooses cruel ideology over fairness and the law,” Campbell said in a statement. “I am proud to stand with my colleagues in defending the rights of all who dedicate their careers to public service, regardless of whether or not the current Administration recognizes the value in their contributions.” The Public Service Loan Forgiveness program was created by Congress in 2007 to provide debt relief to those who dedicate their careers to the service of others. For those who qualify, the program forgives borrowers’ remaining federal student loan debt after ten years of service and payments. More than a million public servants have used the program to pursue careers that “might have otherwise been out of reach,” the attorney general’s office said. State governments rely on the program to recruit and retain professionals in fields such as education, health care and law enforcement. On Oct. 31, the Education Department finalized a new rule that gave itself the power to unilaterally declare entire agencies or organizations ineligible employers for the debt forgiveness program if the Trump administration determines they have a “substantial illegal purpose,” the attorney general’s office said. “The rule defines such ‘illegality’ to include 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 attorney general’s office said. The rule is set to take effect in July 2026. States could be faced with “severe staffing shortages, higher turnover, and skyrocketing costs to maintain essential services,” the attorney general’s office said. 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 Campbell in filing this lawsuit, which she co-led with the attorneys general of New York, California, and Colorado, are the attorneys general of Arizona, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Michigan, Minnesota, Nevada, New Jersey, New Mexico, Oregon, Rhode Island, Vermont, Washington, Wisconsin, and the District of Columbia.
