Judges Strike Down Overhaul of Loans   07/01 06:16

   

   WASHINGTON (AP) -- A pair of federal judges struck down a Trump 
administration overhaul to a public service forgiveness program for student 
loans, ruling Tuesday in separate cases in favor of advocates who said the 
program risked becoming a tool for political retribution.

   U.S. District Judge Myong Joun in Massachusetts vacated the U.S. Education 
Department's changes, saying they overstepped the agency's power and threatened 
to violate First Amendment protections for free speech. The ruling came in 
response to a pair of lawsuits filed by more than 20 states along with a 
coalition of nonprofit groups and cities.

   In Washington, D.C., District Judge Amir Ali in Washington issued a similar 
ruling in a case brought by nonprofit organizations. The rulings came a day 
before the new rules were set to take effect.

   Under Secretary of Education Nicholas Kent said the department was 
evaluating next steps.

   "The Department stands behind this commonsense policy to ensure that 
taxpayer dollars are never used to subsidize illegal activities," Kent said in 
a written statement.

   Congress created Public Service Loan Forgiveness in 2007 to encourage 
college graduates to work in government and nonprofit jobs. It promised to 
forgive their federal student loans after they worked in public service jobs 
for 10 years.

   Last year, the Trump administration moved to add new eligibility rules that 
would strip the benefit from workers whose employers are deemed to have a 
"substantial illegal purpose."

   The overhaul targeted nonprofits and government organizations that support 
causes at odds with the Trump administration's priorities.

   It gave the education secretary power to exclude groups from the program if 
they engage in the trafficking or "chemical castration" of children, illegal 
immigration or supporting terrorist organizations. Its definition of "chemical 
castration" included using hormone therapy or drugs that delay puberty.

   The overhaul amounted to a major reworking of a program that has canceled 
loans for more than 1 million Americans. Nonprofits and government groups said 
it undercut an important benefit that helped attract college graduates to jobs 
that traditionally pay less than the private sector.

   "This decision is a win for the communities that depend on local nonprofits 
and for the workers who serve them," said Diane Yentel, president and CEO of 
the National Council of Nonprofits, one of the plaintiffs in the Massachusetts 
case.

   One of the plaintiffs in the Washington case, Student Defense, said the 
judge's ruling is a victory for student loan borrowers.

   "Public servants should not have to worry that the federal government will 
punish them because of their employer's mission or perceived political views," 
said Aaron Ament, Student Defense's president.

   Joun said the new rules threatened to impose the administration's policy 
views on employers. The judge also faulted the department for failing to 
connect its definitions of illegal activity to criminal statutes.

   "The Department cannot create new criminal prohibitions through rulemaking," 
he wrote.

   The judge also questioned the department's stated rationale for proposing 
the new rules, drawing on its own estimates that fewer than 10 employers would 
be barred from the program per year.

   "The Department offers no explanation for why a Final Rule with such 
sweeping consequences is necessary to address the possibility that, at most, 
ten employers each year may be engaging in illegal activity," Joun wrote.

   In his ruling, Joun noted that more than 100 supporting briefs were filed on 
behalf of the groups challenging the rules, while none were filed in support of 
the Trump administration's change.