Attorney General Bonta Opposes Trump Administration’s Weaponization of Student Loan Forgiveness for Public Servants

Proposed rule could block student loan forgiveness for thousands, deter job seekers from entering public service

OAKLAND — California Attorney General Rob Bonta today led a coalition of 22 attorneys general in opposing a proposed U.S. Department of Education (ED) regulation that would exclude some employees from Public Service Loan Forgiveness (PSLF) eligibility based on whether their employers engage in actions that the Trump Administration deems to have a "substantial illegal purpose.” The proposed rule may threaten PSLF eligibility for organizations that are engaged in longstanding, important, and legal activities, such as providing legal or other services to immigrants, providing gender-affirming care to minors, participating in diversity, equity, and inclusion (DEI) initiatives, or engaging in civil protest and the right to assembly. 

“Nationwide, millions of Americans took out student loans to become public servants with the promise of debt relief down the line, and now, the Trump Administration is attempting to hold this debt relief tool hostage from employers that engage in actions the President does not like,” said Attorney General Bonta. “The promise of Public Service Loan Forgiveness allows states like California to attract and retain talent to serve the public good — this is critically important and essential for borrowers who would otherwise be unable to afford serving in the public sector. Today, I urge the U.S. Department of Education to reconsider this vague and arbitrary rule and put public service ahead of retributive political games.”

PUBLIC SERVICE LOAN FORGIVENESS BACKGROUND

In 2007, a bipartisan Congress created PSLF to encourage college graduates to work in the public sector, where salaries are often lower than at for-profit companies. The PSLF program enables public servants who work in eligible government and nonprofit roles to have their qualifying federal student loans forgiven after 10 years of qualifying service and payments. It helps public service employers recruit and retain skilled workers who might otherwise be forced to turn to private sector employment to afford to pay their student loans. Many California state employees are eligible for, actively pursuing, or have already benefited from PSLF as a means of managing the significant student debt that they incurred in preparing for skilled public service careers. 

THE PROPOSED RULE 

ED’s proposed rule would allow the Secretary of Education to disqualify employers from PSLF if she determines they are engaged in “substantially illegal” activity. The vagueness of the rule could empower the Trump Administration to target politically disfavored conduct and may threaten PSLF eligibility for organizations that are engaged in longstanding and legal activities. As drafted, the rule would create uncertainty as to who is an eligible employer and will deter student borrowers from entering public service. If allowed to go into effect, ED could deem the State of California or specific California state agencies ineligible for PSLF, denying loan relief to state employees, and undercutting the state’s ability to recruit and retain skilled employees.  

In sending the comment letter, Attorney General Bonta and the attorneys general of Colorado, Massachusetts, and New York lead the attorneys general of Arizona, Connecticut, Delaware, the District of Columbia, Hawaii, Illinois, Maine, Maryland, Michigan, Minnesota, Nevada, New Jersey, New Mexico, Oregon, Rhode Island, Vermont, Washington, and Wisconsin. 

A copy of the letter can be found here.