Attorney General James Wins Case Preventing Weaponization of Public Service Loan Forgiveness Program

NEW YORK – New York Attorney General Letitia James today released the following statement after a judge permanently blocked the Trump administration from denying loan forgiveness to teachers, nurses, and other public servants whose employers are not aligned with the administration’s ideology:

“Public servants should not have to pass a political loyalty test to earn the loan forgiveness they were promised. This rule was a blatant attempt to punish teachers, nurses, firefighters, social workers, and other public servants for working in states or for organizations that this administration does not like.

“Today, we have stopped the federal government from turning a program created to honor public service into a weapon for political retaliation.”

In November 2025, Attorney General James led a coalition of 22 other attorneys general in challenging a new rule from the U.S. Department of Education that unlawfully restricted eligibility for the Public Service Loan Forgiveness (PSLF) program, which allows government and nonprofit employees to have their federal student loans forgiven after 10 years of qualifying public service. The rule, set to take effect tomorrow, would have given the administration the power to deem state governments, hospitals, schools, and nonprofit organizations ineligible for PSLF based on their support for immigrants, gender-affirming health care, or diversity programs.

Today, the U.S. District Court for the District of Massachusetts granted Attorney General James and the coalition's motion for summary judgment, declaring the rule illegal and permanently blocking it from taking effect.