by Karla Ciaglo CTNewsJunkie
Hartford, CT — Connecticut and 21 other states are suing the U.S. Department of Education over a new rule they say unlawfully politicizes student loan forgiveness and punishes public servants for where they work and what they believe.
The coalition’s lawsuit, filed Monday in federal court, challenges an October 31 rule that allows the Department to disqualify entire state or local governments and nonprofits from the Public Service Loan Forgiveness program if the administration determines they have engaged in a “substantial illegal purpose.”
State officials argue the vague standard gives the Trump administration broad authority to target organizations it dislikes — including those that assist immigrants, provide gender-affirming care, promote diversity, or support political protest.
“Donald Trump and Linda McMahon want to impose an illegal MAGA litmus test on billions of dollars in loan forgiveness for public servants,” Connecticut Attorney General William Tong said Monday. “Engage in protest? Loan forgiveness yanked. Care about immigrant families? No loan forgiveness for you. Believe in diversity or support LGBTQ+ kids? Yanked. These are teachers, nurses, police officers, and firefighters who followed the rules. This is cruel, this is wrong, and we’re suing to stop it.”
The attorneys general argue the rule violates the Higher Education Act and the Administrative Procedure Act’s ban on “arbitrary and capricious” rulemaking. Established by Congress in 2007 with bipartisan support and signed into law by President George W. Bush, the PSLF program forgives remaining federal student loan debt for borrowers who work at least 10 years in public service while making regular payments.
According to the Connecticut Student Loan Ombudsperson, 11,840 Connecticut borrowers have already had loans forgiven under PSLF and another 12,500 are currently enrolled and on track to qualify. Nationwide, more than one million workers have benefited from the program.
“This unnecessary punitive rule is cruel and misguided — favoring loyalty to Trump over hard work and dedication to public service,” said Sen. Richard Blumenthal, D-CT. “We must keep our promises to Connecticut teachers, police officers, and other public servants who have earned loan forgiveness through years of sacrifice and caring for people.”
U.S. Rep. Joe Courtney, D-2nd, who helped author the PSLF statute, said Congress never gave the Department of Education discretion to redefine eligibility based on ideology. The law passed both chambers with overwhelming bipartisan majorities — 273-149 in the House and 94-18 in the Senate.
“Politicizing PSLF eligibility will throw public servants into greater uncertainty and harm organizations that are filling critical service gaps in our communities,” Courtney said.
The new rule is scheduled to take effect in July 2026. It lists as potentially “illegal” activities that support undocumented immigrants, provide gender-affirming health care, promote diversity and inclusion, or engage in political advocacy. The lawsuit argues that such classifications give the administration “unfettered power” to revoke loan eligibility for lawful public-service work, undermining the statute’s original purpose.
“It’s not illegal to be a teacher, a firefighter, or a doctor treating sick kids,” Tong said. “They’re inventing standards that have no legal meaning. That’s the textbook definition of arbitrary and capricious.”
Connecticut Education Association President Kate Dias said the rule threatens an already fragile teaching workforce.
“It took me 16 years to navigate the bureaucracy before I finally got loan forgiveness,” she said. “We should not make it hard. We should make it joyful. We should value people who choose service over profit.”
Gian-Carl Casa, president and CEO of the Connecticut Community Nonprofit Alliance, said the policy would make it even harder for nonprofits to retain qualified staff.
“If nonprofits can’t attract and retain quality employees, they can’t provide the services people depend on,” he said. “Depriving them of eligibility will hurt them and send the message that their work is expendable.”
The lawsuit is the 39th legal action Connecticut has taken against the Trump administration. Tong said it reflects a broader effort by states to push back when federal leaders “abandon their duty.”
“This isn’t just illegal, it’s immoral,” Tong said. “It tells every teacher, nurse, firefighter, and nonprofit worker who kept their promise to serve that Washington won’t keep its promise to them.”
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.