Attorney General Phil Weiser co-leads suit against Education Department to block public service student loan relief restrictions

Nov. 3, 2025 (DENVER) – Attorney General Phil Weiser and 21 other attorneys general today filed a lawsuit against the U.S. Department of Education for unlawfully restricting eligibility for a federal program that allows government and nonprofit employees to get student loan relief after 10 years of service.

The attorneys general are challenging a new federal rule that would make certain state and local governments or nonprofit organizations ineligible employers for the Public Service Loan Forgiveness program, or PSLF, if the federal government determines they have engaged in activities or actions that are disfavored by the administration. The coalition argues that the sweeping new rule is unlawful and targeted to punish states and organizations that the administration does not like.

“Public service loan forgiveness is a legal requirement and a promise to those entering into public service,” Attorney General Weiser said. “To undermine access to this promise and punish certain public servants is appalling and illegal. We won’t stand for this administration’s bullying tactics and playing political games with public servants’ financial security.”

The PSLF program was established by Congress in 2007 to provide financial incentives to those who dedicate their careers to public service. The program forgives borrowers’ remaining federal student loan debt after 10 years of qualifying public service and consistent payments. Over the years, PSLF has enabled more than one million public servants to pursue careers that might have otherwise been out of reach. For state governments, PSLF is a critical tool to recruit and retain qualified professionals in vital fields like education, health care, and law enforcement.

From October 2021 to May 2024, 17,650 borrowers in Colorado had more than $1.2 billion in student loan debt discharged through PSLF, according to Education Department data (PDF).

On Oct. 31, the Education Department finalized a new rule granting itself the power to unilaterally declare entire agencies or organizations ineligible employers for PSLF if the administration determines they have a “substantial illegal purpose.” The rule includes only a very limited definition of such “illegality,” which includes activities that support undocumented immigrants, provide gender-affirming health care to transgender youth, engage in political protest, and promote diversity, equity, and inclusion efforts. The rule is scheduled to take effect in July 2026.

Attorney General Weiser and the coalition warn that this vague new authority could have devastating consequences nationwide. Countless public workers could suddenly lose PSLF eligibility through no fault of their own. States could be forced to confront severe staffing shortages, higher turnover, and skyrocketing costs to maintain essential services.

The coalition’s lawsuit argues that the department’s new rule is flatly illegal. The PSLF statute guarantees loan forgiveness for anyone who works full-time in qualifying public service; it does not grant the department discretion to carve out exceptions based on ideology. They assert that the rule’s vague “substantial illegal purpose” standard is arbitrary and capricious as it gives the department unfettered power to target specific state policies or social programs while exempting federal agencies from scrutiny.

The attorneys general are asking the court to declare the rule unlawful, vacate it, and bar the Education Department from enforcing or implementing it.

The attorneys general of California, Colorado, Massachusetts and New York are co-leading the lawsuit. They are joined by the attorneys general of Arizona, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Michigan, Minnesota, Nevada, New Jersey, New Mexico, Oregon, Rhode Island, Vermont, Washington, Wisconsin, and the District of Columbia.

A group of private plaintiffs and local governments is also filing a lawsuit today to block the implementation of the new rule.

Read the complaint Massachusetts v. U.S. Department of Education et al (PDF).

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Media Contact:
Lawrence Pacheco
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lawrence.pacheco@coag.gov