A coalition of 21 Democrat-led states and the District of Columbia is suing the U.S. Department of Education to block a new rule that would disqualify employers from a federal student debt relief program, based on their activities that have an “illegal purpose.”
The lawsuit, filed on Nov. 3 in a Massachusetts federal court, centers on the department’s final rule that tightens eligibility criteria for employers participating in the Public Service Loan Forgiveness (PSLF) program. Since 2007, the taxpayer-funded program has discharged the remaining federal student loan balance for borrowers who make 10 years of qualifying payments while working full time in public service, such as for government agencies or qualified nonprofit organizations.
