On November 3, 2025, a broad coalition of over a dozen cities, labor unions, and nonprofit organizations filed a lawsuit against the U.S. Department of Education to challenge the Trump-Vance Administration’s illegal hijacking of the Public Service Loan Forgiveness (PSLF) program to silence local governments and non-profit organizations that do work that goes against the administration’s political agenda.
The new PSLF rule would allow the Secretary of Education to disqualify government and nonprofit employers that disagree with the administration’s policies from the PSLF program. Public service employers and organizations representing public service workers warn that these efforts to weaponize PSLF will have a chilling effect on the entire public service workforce.
The lawsuit 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, 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 that don’t align with “the administration’s agenda” —such as those providing legal services to immigrant or LGBTQIA+ communities—the rule will deprive government and non-profit employers of highly-qualified individuals working to serve those in need nationwide.
The lawsuit asks the courts to block the rule and safeguard the PSLF program as a bipartisan promise to those who choose to dedicate their lives to public service, regardless of politics.
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, AFT, American Federation of State, County and Municipal Employees, and National Education Association. The coalition is represented by Democracy Forward and Protect Borrowers in this matter; the County of Santa Clara and City and County of San Francisco represent themselves.
On February 10, 2026, plaintiffs filed an amended complaint.
The case is National Council of Nonprofits et al. v. McMahon.
Timeline
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Lawsuit filed to challenge the illegal hijacking of the PSLF program to serve a political agenda.
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We filed an amended complaint.
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We filed a motion for summary judgment.
