RFK Center for Justice and Human Rights v. McMahon

Congress created the Public Service Loan Forgiveness program in 2007 to encourage students to pursue public service careers after graduation. The program offers federal student loan forgiveness to those who spend ten years repaying such loans while working full time in a public service job. The statute provides a clear list of qualifying employers, which include military service, emergency management, public health, government, public safety, law enforcement, early childhood education and library science, and all 501(c)(3) organizations, among others.

On October 31, the Department of Education issues a new rule that disqualifies employers from the PSLF program if the Department deems them to have a “substantial illegal purpose.” Under the rule, the Department will decide for itself whether this standard is met, based on its unilateral determination that an organization has engaged in activities disfavored by the administration concerning immigration, gender affirming care, and purported discrimination, along with other areas. The rule’s vague and overbroad language permits arbitrary enforcement against mission-driven organizations doing work or expressing opinions opposed by the government. The new rule threatens to harm many of the 2.5 million federal student loan borrowers who have collectively worked more than 100 million months in public service jobs in order to qualify for PSLF forgiveness.

Public Citizen, representing Robert F. Kennedy Human Rights, the American Immigration Council, The Door – A Center of Alternatives, Inc., and the League of United Latin American Citizens (LULAC), and co-counseling with Student Defense, filed suit to challenge the rule. The lawsuit asks the court to declare the new rule unlawful and to declare that the Department lacks the legal authority to change the statutory criteria for PSLF.