Colorado joins multistate lawsuit against Trump administration’s restrictions to student loan forgiveness program
Andrea Teres-Martinez/The Aspen Times
Colorado Attorney General Phil Weiser joined 21 other state attorneys Monday in filing a lawsuit over a new Trump administration policy that would limit eligibility for a popular student loan forgiveness program.
The new rule, finalized Oct. 30 and scheduled to take effect in July 2026, allows the U.S. Department of Education to exclude state and local governments and nonprofits from the Public Service Loan Forgiveness program if they’re found to serve a “substantial illegal purpose.” The move could disqualify some government and nonprofit employees from federal loan cancellation.
Weiser and other attorney generals involved in the lawsuit argue the new rule includes a limited definition of illegality, which targets activities that “support undocumented immigrants, provide gender-affirming health care to transgender youth, engage in political protest, and promote diversity, equity, and inclusion efforts,” according to a news release from Weiser’s office.
“The coalition argues that the sweeping new rule is unlawful and targeted to punish states and organizations that the administration does not like,” the release states, warning the move would create severe staffing shortages, higher turnover, and skyrocketing costs to maintain essential services for states across the country.
The student loan forgiveness program was established by Congress in 2007 to provide financial incentives to those who dedicate their careers to public service by forgiving borrowers’ remaining federal student loan debt after 10 years of qualifying public service and consistent payments.
The lawsuit, filed in the U.S. District Court of Massachusetts, states the 2007 law establishing the forgiveness program bars the executive branch from disqualifying public employers.
“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,” the release states.
In Colorado alone, more than $1.2 billion in student loan debt was forgiven from nearly 17,700 borrowers through the program between October 2021 and May 2024, according to data from the U.S. Department of Education.
A coalition of U.S. cities, labor unions and nonprofits also filed a separate lawsuit against the Trump administration in Massachusetts on Monday.
