---

Press Release:

AG Tong Sues Depart­ment of Edu­ca­tion to Block Pub­lic Ser­vice Loan For­give­ness Restric­tions

Preceding Event:

The Pub­lic Ser­vice Loan For­give­ness (PSLF) pro­gram was estab­lished in 2007 by Con­gress as an incen­tive for peo­ple who ded­i­cat­ed their careers to pub­lic ser­vice. After mak­ing con­sis­tent pay­ments on stu­dent loans and ten years pub­lic ser­vice, the pro­gram for­gives the bor­row­er’s remain­ing fed­er­al loan bal­ance.

Accord­ing to the press release from Nov. 3, 2025, “On Octo­ber 31, the Edu­ca­tion Depart­ment (ED) final­ized a new rule grant­i­ng itself the pow­er to uni­lat­er­al­ly declare entire agen­cies or orga­ni­za­tions inel­i­gi­ble employ­ers for PSLF if the admin­is­tra­tion deter­mines they have a ‘sub­stan­tial ille­gal pur­pose.’ The rule includes only a very lim­it­ed def­i­n­i­tion of such ‘ille­gal­i­ty,’ which includes 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 rule is sched­uled to take effect in July 2026.”

General Overview:

Accord­ing to the press release, “Attor­ney Gen­er­al William Tong and 21 oth­er attor­neys gen­er­al today filed a law­suit against the U.S. Depart­ment of Edu­ca­tion (ED) for unlaw­ful­ly restrict­ing eli­gi­bil­i­ty for the Pub­lic Ser­vice Loan For­give­ness (PSLF) pro­gram, which allows gov­ern­ment and non­prof­it employ­ees to have their fed­er­al stu­dent loans for­giv­en after ten years of ser­vice. The attor­neys gen­er­al are chal­leng­ing a new fed­er­al rule that would deem cer­tain state and local gov­ern­ments or non­prof­it orga­ni­za­tions inel­i­gi­ble employ­ers for PSLF if the fed­er­al gov­ern­ment deter­mines they have engaged in actions with a sub­stan­tial ille­gal pur­pose – in prac­tice, activ­i­ties, or actions that are dis­fa­vored by the admin­is­tra­tion. The coali­tion argues that the sweep­ing new rule is unlaw­ful and tar­get­ed to pun­ish states and orga­ni­za­tions that the admin­is­tra­tion does not like.”

The coali­tion claims that the new rule is “flat­ly ille­gal” because the statute cre­at­ing the pro­gram guar­an­tees loan for­give­ness to any­one who is qual­i­fied for it and that the statute “does not grant ED dis­cre­tion to carve out excep­tions based on ide­ol­o­gy.” The coali­tion argues that not only is the def­i­n­i­tion of “sub­stan­tial ille­gal pur­pose” unclear, but that the lack of clar­i­ty gives ED the pow­er to “tar­get spe­cif­ic state poli­cies or social pro­grams while exempt­ing fed­er­al agen­cies from scruti­ny.”

The suit is ask­ing the court to declare the rule unlaw­ful and pre­vent and pro­hib­it ED from imple­ment­ing it.

Date of filing:

Nov. 3, 2025

Case #:

1:25-cv-13244

Case title:

Com­mon­wealth of Mass­a­chu­setts et al v. U.S. Depart­ment of Edu­ca­tion et al

Plaintiffs: 21 states and D.C.

• STATE OF NEW YORK,
• COMMONWEALTH OF MASSACHUSETTS,
• STATE OF CALIFORNIA,
• STATE OF COLORADO,
• STATE OF CONNECTICUT,
• STATE OFN ARIZONA,
• STATE OF DELAWARE,
• STATE OF HAWAII,
• STATE OF ILLINOIS,
• STATE OF MAINE,
• STATE OF MARYLAND,
• STATE OF MICHIGAN,
• STATE QOF MINNESOTA,
• STATE OF NEVADA,
• STATE OF NEW JERSEY,
• STATE OF NEW MEXICO,
• STATE OF OREGON,
• STATE OF RHODE ISLAND,
• STATE OF VERMONT,
• STATE OF WASHINGTON,
• STATE OF WISCONSIN,
• DISTRICT OF COLUMBIA

Defendants:

• U.S. DEPARTMENT OF EDUCATION,
• LINDA MCMAHON, in her offi­cial capac­i­ty as Sec­re­tary of the U.S. Depart­ment of Edu­ca­tion

Court:

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS

Related Case #(‘s):

1:25-cv-13242-MJJ

Status as of Dec. 1, 2025:

OPEN
Last fil­ing Nov. 24, 2025

---