Nearly two dozen states sue Trump admin over rule limiting student loan forgiveness for public servants

Source: CNBC

Published Mon, Nov 3 2025 11:58 AM EST Updated Moments Ago


New York Attorney General Letitia James and more than a dozen other state attorneys general are suing the Trump administration over its new rule limiting eligibility for a popular student loan forgiveness program.

The AGs’ lawsuit was prompted by the U.S. Department of Education’s final rule, released last week, that changes the definition of a “qualifying employer” under the Public Service Loan Forgiveness program. The rule excludes certain organizations “that engage in unlawful activities” such as “supporting terrorism and aiding and abetting illegal immigration,” according to an Education Department statement.

PSLF, signed into law in 2007 by George W. Bush, offers debt cancellation after a decade to borrowers who work for non-profits and the government. “Public Service Loan Forgiveness was created as a promise to teachers, nurses, firefighters, and social workers that their service to our communities would be honored,” said Attorney General James in a statement. “Instead, this administration has created a political loyalty test disguised as a regulation,” James said.

The U.S. Department of Education did not immediately respond to a request for comment.

Read more: https://www.cnbc.com/2025/11/03/states-sue-trump-public-service-loan-forgiveness-pslf.html