Twenty-two states are suing the U.S. Department of Education over a rule that would restrict eligibility for a student loan forgiveness program designed for public service workers like teachers and librarians.

The suit, filed in federal court Monday, is in response to a rule issued by the department late last month that would exclude certain employers from the program if they serve a “substantial illegal purpose.” According to statements from Department of Education officials, an “illegal purpose” could include organizations or government agencies the department deems to be supporting undocumented people, providing gender-affirming health to trans youth, promoting diversity, equity, and inclusion efforts or engaging in political protest. It is scheduled to take effect in July of next year.

The suit argues the department doesn’t have the authority to issue these restrictions. It also argues the new rule is vague enough that it could be levied against entities disliked by the Trump administration. In addition to Washington Attorney General Nick Brown, the suit includes other attorneys general from New York, Massachusetts, California and Colorado, with additional support from 18 other states and the District of Columbia. It seeks to prevent the department from enforcing the rule.

The Public Service Loan Forgiveness (PSLF) program, created by Congress in 2007, forgives remaining federal student loan debt for borrowers who work in government or nonprofit roles for at least 10 years while making qualifying payments. It’s designed to help recruit and retain employees like teachers, nurses and police officers.

“The PSLF program helps people afford to pursue public service careers without the weight of crushing debt,” Brown said in a statement announcing the lawsuit. He added that the new rule could discourage people from serving in critical public-sector jobs.

In a statement, the U.S. Department of Education called the suit unconscionable” for defending what it calls “criminal activity.”

“This is a commonsense reform that will stop taxpayer dollars from subsidizing organizations involved in terrorism, child trafficking, and transgender procedures that are doing irreversible harm to children,” the statement said. “The final rule is crystal clear: the Department will enforce it neutrally, without consideration of the employer’s mission, ideology, or the population they serve.”

The rule would apply only to those who join organizations blacklisted by the rule after it’s implemented next summer.

The rule could reduce PSLF eligibility nationwide, according to Brown, resulting in more than $1.5 billion in additional loan payments over the next decade. Between October 2021 and January 2025, more than 23,000 Washington borrowers had $1.62 million in loans forgiven through the program.

Brown’s office is asking anyone who wants to discuss the PSLF program in light of the new rule to fill out a form.

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