Public workers could be denied loan forgiveness if cities defy Trump, lawsuit alleges

(NPR) The cities of Albuquerque, N.M., Boston, Chicago and San Francisco are suing the Trump administration over changes it plans to make to the popular Public Service Loan Forgiveness program, or PSLF.

The lawsuit, which also includes the nation's two largest teachers unions and the American Federation of State, County and Municipal Employees, comes less than a week after the U.S. Department of Education published a rule change to PSLF.

Effective July 1, 2026, the department says the change will allow it to deny loan forgiveness to workers whose government or nonprofit employers engage in activities with a "substantial illegal purpose." The job of defining "substantial illegal purpose" will fall not to the courts but to the education secretary.

PSLF was created by Congress in 2007, and signed by then-President George W. Bush, to cancel the federal student loan debts of borrowers who spend a decade working in public service, including teaching, nursing and policing.

https://www.npr.org/2025/11/03/nx-s1-5591157/trump-pslf-teachers-loan-forgiveness