22 states and groups sue Trump admin over PSLF rule limiting debt relief for public service workers.

The Trump administration faces multiple lawsuits over a new rule limiting the Public Service Loan Forgiveness (PSLF) program. The policy, set to take effect July 1, 2026, could deny debt relief to borrowers whose employers are deemed to have a “substantial illegal purpose,” such as aiding undocumented immigrants or providing gender-affirming care. Twenty-two states, cities, unions, and nonprofits have sued, calling the rule unlawful and politically driven. Critics warn it could deter workers from public service, while the Education Department defends it as a safeguard for taxpayer funds, noting past payments will remain valid.