Santa Clara County joined a coalition of over a dozen cities, labor unions, nonprofit organizations and advocacy groups Monday to sue the Trump administration, citing violations of loan forgiveness law.
The coalition is suing the U.S. Department of Education for infringing on the Higher Education Act (HEA), which stipulates that all government and 501(c)(3) employers are eligible for public service loan forgiveness (PSLF) “without limitation.”
The PSLF program was established in 2007 for borrowers to have their student loans forgiven in exchange for completing ten years of public service. Now, the Department of Education has decided to restrict its scope.
“No payment shall be credited as a qualifying payment for any month subsequent to determination that a qualifying employer engaged in activities that have a substantial illegal purpose,” Tamy Abernathy, the director of the Policy Coordination Group (PCG) in the Office of Postsecondary Education (OPE), said during a Department of Education negotiated rulemaking session in June.
Santa Clara County and its coalition said they view the Department’s actions as an attempt to weaponize the bipartisan PSLF program. The coalition asserts that the Higher Education Act does not confer any authority to selectively disqualify employers from participation in the PSLF program.
“It is arbitrary and capricious; and it contravenes fundamental constitutional principles of free speech and due process,” the prosecution contended in their National Council of Nonprofits et al. v. McMahon complaint.
The coalition accused the Trump-Vance administration of granting PSLF funds according to levels of compliance with its agenda.
“In an attempt to target organizations and jurisdictions whose missions and policies do not align with its political positions on immigration, race, gender, free speech, and public protest, the Trump-Vance Administration has weaponized the PSLF program in a way that defies how Congress designed it,” read the plaintiffs’ complaint.
A Fact Sheet accompanying the publication of the new rule, Executive Order 14235, explained that the Order is designed to end federal support for organizations that harm “American values and the public interest.”
The Trump Administration asserts that its actions are necessary in ending the subsidization of illegal activities, citing illegal immigration and disruption to public order as crucial points.
“This is a commonsense reform that will stop taxpayer dollars from subsidizing organizations involved in terrorism, child trafficking, and transgender procedures that are doing irreversible harm to children,” Under Secretary of Education Nicholas Kent said in a statement supporting the Department’s new rule.
Santa Clara County stands with over a dozen cities in its decision to sue the Trump Administration, including Boston, Chicago and San Francisco.
“The County of Santa Clara employs more than 24,000 dedicated public servants, and we will continue to defend their rights, and the rights of all government employees, in court,” the County said in a statement Monday.
Santa Clara County warned that the new rule could have a chilling effect on the public service workforce, as local governments across the nation are at risk of losing access to debt relief.
The Daily has reached out to the Department of Education for comment.