SF, Santa Clara County sue over federal rule they say politicizes loan forgiveness program - Local News Matters

San Francisco and Santa Clara County filed a lawsuit against the U. S. Department of Education, claiming a new rule unjustly disqualifies certain public service employers from the Public Service Loan Forgiveness (PSLF) program. This rule, which targets organizations contrary to the administration's policies, allegedly violates the Administrative Procedure Act and the Higher Education Act. City Attorney David Chiu emphasized that the rule breaks a bipartisan promise made to public servants in 2007.

Santa Clara County Counsel Tony LoPresti labeled the rule "deeply dangerous," arguing it undermines local governments' ability to hire essential workers. The PSLF program plays a vital role in helping cities recruit and retain employees amid high living costs. The lawsuit is supported by a coalition that includes Boston, Chicago, and various national organizations, represented by Protect Borrowers and Democracy Forward. The U. S.

Department of Education recently announced its final rule aimed at restoring the program's intended purpose. Critics argue that the new definition of a "qualifying employer" could exclude many organizations unjustly.