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student borrower protection center
Teachers Union Sues Over Trump Attack on Student Loan Repayment Programs
"By effectively freezing the nation's student loan system, the new administration seems intent on making life harder for working people."
Mar 19, 2025
A leading teachers union announced Wednesday that it is suing the Trump administration for cutting off public service workers with federal student loans from affordable repayment and debt relief programs.
"By effectively freezing the nation's student loan system, the new administration seems intent on making life harder for working people, including for millions of borrowers who have taken on student debt so they can go to college," said American Federation of Teachers (AFT) president Randi Weingarten in a statement. "The former president tried to fix the system for 45 million Americans, but the new president is breaking it again."
"The AFT has fought tirelessly to make college more affordable by limiting student debt for public service workers and countless others—progress that's now in jeopardy because of this illegal and immoral decision to deny borrowers their rights under the law,” the union leader continued. "Today, we're suing to restore access to the statutory programs that are an anchor for so many, and that cannot be simply stripped away by executive fiat."
The 1.8 million-member union is represented by the law firm Berger Montague PC and the Student Borrower Protection Center (SBPC), which filed the federal lawsuit late Tuesday in Washington, D.C.
"The U.S. government, through the U.S. Department of Education (ED or the department), is the country's largest creditor of student loans," the complaint notes. "Today, there are nearly 43 million federal student loan borrowers, with approximately $1.62 trillion outstanding in debt."
As the filing details, Congress "designed this federal student loan program to expand access to higher education and increase economic mobility regardless of one's financial station," and specifically "directed ED to offer income-driven repayment (IDR) plans that tie a borrower's monthly payment to their income."
However, under President Donald Trump and Education Secretary Linda McMahon, the department has shut down IDR plans and not "indicated when it will—if ever—resurrect the programs," the complaint continues. "The result: borrowers are unable to access affordable monthly payment plans, some borrowers are being thrust into default on their debt, and some public service workers are being denied their statutory right to lower their monthly payment and earn credit towards Public Service Loan Forgiveness (PSLF)."
"This is not occurring in a vacuum for student loan borrowers," the document stresses. "It comes in the context of the president repeatedly announcing his plans to close the Department of Education, which was created by an act of Congress. And, it is on the heels of the recent equally unlawful actions to gut critical student loan protections from the Consumer Financial Protection Bureau."
Additionally, as Common Dreamsreported earlier this month, Trump has directly attacked the PSLF with an executive order excluding from the debt relief program "organizations that engage in activities that have a substantial illegal purpose," targeting groups that help immigrants and transgender youth and organize protests that involve actions such as blocking roads.
"A significant number of AFT's membership has student debt, is working in public service, and has sought or will try to seek access to an IDR plan," the suit explains. "These borrowers simply want to pay back their student loans according to the terms that Congress, and their contracts, provide."
The AFT asked the court to declare that the Education Department is "unlawfully withholding" IDR plans and the PSLF program, and prevent the ED from "collecting from borrowers who are eligible for income-driven repayment until it satisfies its statutory, regulatory, and contractual obligations." The union also wants the court to order the department to fulfil those obligations.
"Student loan borrowers are desperate for help, struggling to keep up with spiking monthly payments in a sinking economy, all while President Trump plays politics with the student loan system," said SBPC executive director Mike Pierce. "Borrowers have a legal right to payments they can afford and today we are demanding that these rights are enforced by a federal judge."
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Trump Attacks Public Service Workers With 'Blatantly Illegal' Loan Forgiveness Order
"Threatening to punish hardworking Americans for their employers' perceived political views is about as flagrant a violation of the First Amendment as you can imagine," said one critic.
Mar 10, 2025
Criticism of U.S. President Donald Trump's executive order intended to limit a program that forgives the federal student loans of borrowers who take public service jobs has grown since he signed it on Friday.
Opponents frame the order as yet another attempt by Trump to quash dissent. The Republican president directed Education Secretary Linda McMahon to propose revisions to the Public Service Loan Forgiveness (PSLF) Program, in coordination with Treasury Secretary Scott Bessent, to exclude "organizations that engage in activities that have a substantial illegal purpose."
The order targets employers "aiding or abetting" violations of federal immigration law and the administration's definition of illegal discrimination, engaging in a pattern of violating state law such as disorderly conduct and obstruction of highways, "supporting terrorism," and "child abuse, including the chemical and surgical castration or mutilation of children or the trafficking of children to so-called transgender sanctuary states for purposes of emancipation from their lawful parents."
Student Defense president Aaron Ament said in a statement that "when PSLF was created by a bipartisan act of Congress and signed into law by [President] George W. Bush, it was a promise from the United States government to its citizens—if you give back to America, America will give back to you."
"In the nearly two decades since, across administrations of both parties, Americans have worked hard and made life decisions under the assumption that the U.S. keeps its word," Ament continued. "Threatening to punish hardworking Americans for their employers' perceived political views is about as flagrant a violation of the First Amendment as you can imagine."
Nadine Chabrier, senior policy counsel at the Center for Responsible Lending, similarly highlighted "serious" First Amendment concerns, saying that "by penalizing individuals seeking loan forgiveness for their associations and the expressive conduct of their employers, new rulemakings could infringe on fundamental rights to speech and association."
"The executive order also undermines the very purpose of PSLF, which Congress established to encourage careers in public service across a broad range of fields," she said. "Stripping PSLF eligibility from nonprofit employees based on the nature of their work will deter skilled professionals from pursuing careers that benefit the public good, weaken critical services for underserved populations and hamper efforts to strengthen vulnerable communities."
American Federation of Teachers (AFT) president Randi Weingarten explained that "PSLF is based on the idea that borrowers who make 10 years of repayments, and who often forgo higher wages in the private sector, can avoid a lifelong debt sentence."
The teachers union sued the Trump's first-term education secretary, Betsy DeVos, "and rogue loan servicers for their failure to administer the program—and we won," Weingarten noted. "This latest assault on borrowers' livelihoods is a cruel attempt to finish the demolition job that DeVos started. The goal is to sow chaos and confusion—separately, the PSLF application form has already been taken offline, making it effectively inaccessible."
The Economic Policy Institute pointed out Monday that "since the creation of the PSLF program, more than 1 million borrowers have received student loan forgiveness, largely due to fixes made under the Biden administration."
"More than 2 million individuals currently qualify for the PSLF program, according to the Department of Education," the think tank added. "The executive order could potentially narrow which organizations qualify for the program."
Student Borrower Protection Center executive director Mike Pierce blasted the order as "blatantly illegal and an all-out weaponization of debt intended to silence speech that does not align with President Trump's MAGA agenda."
"It is an attack on working families everywhere and will have a chilling effect on our public service workforce doing the work every day to support our local communities," Pierce warned. "Teachers, nurses, service members, and other public service workers deserve better than to be used as pawns in Donald Trump's radical right-wing political project to destroy civil society. This will raise costs for working people while doing nothing to make America safer or healthier."
In addition to scathing critiques, some groups threatened to challenge the order. Weingarten vowed that "the AFT won't stop fighting, in court and in Congress, until every single public service worker gets the help the law affords them."
Ament declared that "if the Trump administration follows through on this threat, they can plan to see us in court."
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'Alarming': Trump CFPB Drops Cases Against Companies Accused of Cheating Consumers
"This sends a dangerous message to corporate America that financial fraud and abuse will go unchecked," said one critic.
Feb 27, 2025
Consumer advocates on Thursday slammed the Trump administration for dropping various enforcement actions against companies accused of activities that include ripping off savings account holders, illegally collecting on student loans, and engaging in an unlawful mortgage broker kickback scheme.
The Consumer Financial Protection Bureau's notices of voluntary dismissal came as the U.S. Senate Committee on Banking, Housing, and Urban Affairs held a hearing for Jonathan McKernan, President Donald Trump's pick to lead the CFPB—which Accountable.US executive director Tony Carrk has called "a gift to big banks and special interests."
"We're getting a very strong message here that if you're a bank, if you're a student loan servicer, and you're violating the law, the CFPB is not only not going to pursue you, they're going to let you out of your case scot-free."
While the former Federal Deposit Insurance Corporation board member awaits confirmation from the GOP-controlled Senate, Trump and Russell Vought, the CFPB's temporary leader, have wasted no time trying to gut the agency and undo the work of its former director, Rohit Chopra, who oversaw cases against the following companies:
- Capital One, accused of cheating millions of banking customers out of more than $2 billion in interest;
- Heights Finance, accused of loan-churning practices that harvested hundreds of millions of dollars in costs and fees;
- Pennsylvania Higher Education Assistance Agency (PHEAA), accused of collecting on student loans discharged in bankruptcy and sending false information to credit reporting companies;
- Rocket Homes, accused of providing incentives to real estate agents and brokers who steered homebuyers toward its loans; and
- Vanderbilt Mortgage & Finance, accused of trapping people in risky loans for manufactured homes.
Court paperwork "in the Rocket Homes case notes that the 'Consumer Financial Protection Bureau dismisses this action, with prejudice, against all defendants,'" according toThe Associated Press. "Dismissing a case without prejudice means that it cannot be refiled. Similar wording was used in the dismissals of the CFPB's Capital One and Vanderbilt Mortgage suits."
Those decisions came after the CFPB last week
dropped a case against SoLo Funds, which the agency accused of misleading borrowers about loan costs. Vought had then teased further action, saying on social media Sunday that "shockingly, the CFPB tried to destroy this company, SoLo, which incurred millions in legal fees and had to lay off 30% of its workforce. It was wrong and we dismissed the case. More to come but the weaponization of 'consumer protection' must end."
Meanwhile, critics like Christine Chen Zinner, consumer policy counsel at Americans for Financial Reform, are framing the CFPB's dismissals as a betrayal of the agency's mission.
"The old CFPB stood ready to protect consumers and wrestle back the ill-gotten gains of big banks like Capital One," Chen Zinner said Thursday. "With this decision, the Trump-appointed leadership is letting Capital One steal $2 billion from its depositors, another example of this administration standing up for Wall Street at the expense of everyday people who deserve the CFPB's protection."
Erin Witte, director of consumer protection at the Consumer Federation of America, also released a statement focused on the bank case.
"The CFPB was created to be a watchdog for big banks, not a lapdog, and dismissing this case is a gift to Capital One," said Witte. "$2 billion is a drop in the bucket for Capital One–less than half a percent of its total assets—but returning this money would make a huge difference to the hardworking Americans who trusted Capital One to safeguard their savings and were kept in the dark about how to earn more."
Witte also described the full list of dismissals as "unprecedented," and toldReuters, "We're getting a very strong message here that if you're a bank, if you're a student loan servicer, and you're violating the law, the CFPB is not only not going to pursue you, they're going to let you out of your case scot-free."
Accountable.US highlighted that "the news stands in stark and alarming contrast to McKernan's remarks... to senators, promising to review all existing CFPB lawsuits before making any decisions around dropping litigation."
Student Borrower Protection Center executive director Mike Pierce said in a statement about the PHEAA case that "Russ Vought and Donald Trump sided with a lawless and corrupt student loan company at the expense of borrowers across the country—another sign that powerful financial interests are driving the capture and demolition of the federal consumer watchdog."
"This is a slap in the face to students, student loan borrowers, and working people everywhere," Pierce continued. "PHEAA lied to some of the poorest and most vulnerable Americans, then illegally hounded them for debt that they did not owe, all to make a buck. And today, cowardly political sycophants backed down on the federal government’s only effort to hold PHEAA accountable."
"Of course, like all fascist toadies, Russ Vought will rightly be forgotten by history and sink into well-deserved irrelevance. But until then, law enforcement at every level of government must rush in to fill the void left by a federal consumer protection agency that now stands only to serve billionaires and big corporations," he added. "Remember: these people prey on those in need because they are motivated only by the desire to exercise power, and they are motivated to do so because they are cowards. It is everyone's job to remind Vought and his cronies of their powers' limits, and to remind the world of their cowardice."
Lauren Saunders, associate director of the National Consumer Law Center, also directed some blame at billionaire Elon Musk, the head of Trump's so-called Department of Government Efficiency, which is leading the administration's efforts to slash the federal workforce and spending.
"The Trump administration and Elon Musk are showing us exactly what it means not to have ordinary people protected by a strong Consumer Financial Protection Bureau—they are dismissing enforcement cases that sought to return billions to working families harmed by corporations accused of egregious conduct that violated the law," said Saunders. "On top of the stop-work order and firing of CFPB workers doing their jobs, this sends a dangerous message to corporate America that financial fraud and abuse will go unchecked. We must preserve a strong, independent, and functional CFPB to stand up to corporate bullies."
Sen. Elizabeth Warren (D-Mass.), a former bankruptcy professor, is the mastermind behind the CFPB. She is also the ranking member of the panel which McKernan appeared before on Thursday. The American Prospect executive editor David Dayen reported that the senator informed the nominee about the dismissals during the hearing.
"Literally while you've been sitting here and you've been talking about the importance of following the law, we get the news that the CFPB is dropping lawsuits against companies that are cheating American families, or alleged to be cheating American families," Warren said. "It seems to me the timing of that announcement is designed to embarrass you and to show exactly who is in charge of this agency right now: Elon Musk and his little band of hackers."
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