AG Nick Brown Joins Lawsuit Challenging New Federal Restrictions On Public Service Loan Forgiveness

Washington State Attorney General Nick Brown has joined a coalition of 21 other attorneys general in a lawsuit against the U.S. Department of Education, challenging a new rule that restricts eligibility for the Public Service Loan Forgiveness (PSLF) program. The lawsuit claims the rule unlawfully allows the federal government to disqualify certain state and local governments or nonprofit organizations from the program based on ideological grounds.

“The PSLF program helps people afford to pursue public service careers without the weight of crushing debt of college or graduate school loans,” Brown said. “Giving back to the community is a good thing that should be encouraged. But now, once again, the administration is showing just how little regard it has for the people who keep our cities and states running.”

Under the new regulation finalized by the Department of Education on Oct. 31, entire agencies or organizations can be declared ineligible employers for PSLF if the administration determines they have a “substantial illegal purpose.” The definition is limited and includes support for undocumented immigrants, gender-affirming care for transgender youth, diversity and inclusion initiatives, and political protest. The rule is set to take effect in July 2026.

The coalition argues the rule violates the PSLF statute, which was enacted by Congress in 2007 to encourage public service careers by offering student loan forgiveness after 10 years of qualifying employment and payments. They contend that the law guarantees loan forgiveness to anyone working full time for a qualifying employer and does not allow the Department of Education to exclude employers based on subjective criteria or political disagreement.

More than one million borrowers have benefited from the PSLF program since its creation. In Washington state, between October 2021 and January 2025, over 23,000 residents had $1.62 million in student loans discharged through PSLF. The program plays a critical role in helping state and local governments attract and retain professionals in education, health care, and law enforcement.

The attorneys general warn that the rule could suddenly strip eligibility from thousands of public workers, forcing states to deal with increased turnover, staffing shortages, and higher costs to maintain essential services. According to the Department of Education’s own estimates, the rule could result in more than $1.5 billion in additional payments from borrowers over the next decade.

The lawsuit asks the court to declare the rule unlawful, vacate it, and prohibit the Department of Education from implementing or enforcing it.

Joining Brown in the suit, which is led by the attorneys general of New York, Massachusetts, California, and Colorado, are the attorneys general of Arizona, Connecticut, Delaware, Hawaiʻi, Illinois, Maine, Maryland, Michigan, Minnesota, Nevada, New Jersey, New Mexico, Oregon, Rhode Island, Vermont, Wisconsin, and the District of Columbia. A separate lawsuit from private plaintiffs and local governments is also being filed to block the rule.

Washington residents affected by the PSLF program and willing to share their experiences are encouraged to fill out a form available through the attorney general’s office. Borrowers can also learn more by attending the “Public Service Loan Forgiveness: Overview and Updates” webinar hosted by the Office of the Student Loan Advocate at the Washington Student Achievement Council.