Office of the
Illinois Attorney General
Kwame Raoul

Chicago – Attorney General Kwame Raoul and a coalition of 21 other attorneys general won their case 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 U.S. District Court for the District of Massachusetts granted Raoul and the coalition’s motion for summary judgment on Tuesday, declaring the rule illegal and permanently blocking it from taking effect.

“The president’s attempt to punish states he disagrees with politically is illegal, and I am pleased with the court’s decision that upholds the rule of law,” Raoul said. “I will continue to stand with my fellow attorneys general to protect nurses, teachers, first responders and all Americans who choose to devote their lives to public service.”

In November 2025, Attorney General Raoul and the coalition challenged a new federal rule that would have deemed certain state and local governments or nonprofit organizations ineligible employers for PSLF if the federal government determines they have engaged in “substantially illegal” actions – in practice, activities or actions that are disfavored by the administration. Raoul and the coalition argued in their lawsuit that the sweeping new rule was unlawful and targeted to punish states and organizations that the administration does not like.  

The rule, set to take effect today, 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.

The PSLF program was established by Congress in 2007 to encourage students to dedicate their careers to the service of others. 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 1 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.  

Joining Raoul in filing this lawsuit are the attorneys general of Arizona, California, Colorado, Connecticut, Delaware, the District of Columbia, Hawaii, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, Rhode Island, Vermont, Washington and Wisconsin.