The Trump-Vance administration has dropped its appeal in a lawsuit challenging changes to the Public Service Loan Forgiveness program, according to a joint stipulation of dismissal filed Wednesday. The decision preserves a federal court ruling that blocked a new rule allowing the Secretary of Education to disqualify government and nonprofit employers from the program based on policy disagreements with the administration.
The case, National Council of Nonprofits et al. v. McMahon, was brought by a coalition including labor unions, nonprofit organizations, and local governments. Plaintiffs included the American Federation of State, County and Municipal Employees, cities of Albuquerque, Boston, and Chicago, San Francisco, Santa Clara County, and organizations such as the National Council of Nonprofits, American Federation of Teachers, and National Education Association.
A federal court had earlier ruled the administration's rewriting of PSLF rules unlawful and ordered the government to stop the practice. The administration's new rule would have allowed the Secretary of Education to disqualify employers that disagreed with administration policies from a program designed to support public service workers.
AFSCME President Patrick Moran said in a statement that the program "was created so public service workers can pursue careers serving their communities without being burdened with debilitating debt" and that weaponizing it would hurt workers and communities. The legal teams representing plaintiffs included attorneys from Democracy Forward, Protect Borrowers, Santa Clara County, and San Francisco's City Attorney's Office.