New Litigation: Public Service Loan Forgiveness

Our partners at the National Council of Nonprofits filed litigation today to protect nonprofit employees’ access to the Public Service Loan Forgiveness program (PSLF). The lawsuit includes a broad range of plaintiffs including city governments, nonprofits, and associations, represented in court by Democracy Forward and Protect Borrowers. The lawsuit challenges a Department of Education final rule issued on Oct. 31 to unlawfully limit which charitable nonprofits qualify as eligible employers under PSLF.

NCN opposes the rule changes, which exclude some nonprofit organizations based on their mission or the communities they serve, undermining the core purpose and effectiveness of the program and harming nonprofit workers across the country. Federal law makes clear that eligibility under PSLF applies to all 501(c)(3) charitable nonprofits. By unlawfully excluding certain nonprofits, the final rule sets a troubling precedent in which current and future administrations, regardless of political party, could change eligibility requirements for the program based on their own priorities or ideology.

The Department moved forward with finalizing the rule, despite widespread opposition, including MANP's. During the public comment period, NCN and other leaders mobilized nonprofits and individuals to submit comments in opposition to the proposed rule. Nearly 14,000 comments were submitted. NCN used AI to analyze the 3,407 comments made publicly available, and we determined found that 99% were submitted in opposition to the Administration’s proposed changes. Learn more in our Advocacy in Action article.

In addition to NCN, 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, Oasis Legal Services, AFT, 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.

Read NCN’s press statement and webpage for more information.