Full Breakdown
Trump Administration Drops Legal Fight Over Public Service Loan Forgiveness Rule
By Drooid · · How we work
Core Event
The Justice Department withdrew two appeals it had filed against federal court rulings that blocked a Trump-era amendment to the Public Service Loan Forgiveness (PSLF) program. The withdrawals, filed as a single-sentence agreement stating each side would bear its own legal costs, left the judges’ decisions intact and kept the original PSLF eligibility criteria in force. No further explanation was offered by federal officials.
Background & Context
PSLF, created in 2007, forgives the remaining federal student debt of borrowers who work for government or nonprofit employers for ten years and make 120 qualifying payments. By the time President Joe Biden took office in 2021, only about 7,000 borrowers had received forgiveness, prompting a temporary waiver to ease application hurdles. In March 2025, the Trump administration issued an executive order directing the Education Department to tighten eligibility, and in October the department issued a rule that would have let Education Secretary Linda McMahon exclude employers whose activities the administration deemed “substantially illegal.” The proposed list included immigration-related work, gender-affirming care, alleged illegal discrimination, reproductive care for minors, protest-related conduct, and “aiding or abetting” violations of federal immigration law.
Legal Challenge and Rulings
On June 30, two federal judges—Judge Myong Joun in Massachusetts and Judge Amir Ali in Washington, D.C.—struck down the rule in separate cases. Both found the department had exceeded its authority under the Higher Education Act and that the rule threatened First-Amendment free-speech rights. Their orders vacated the rule entirely, meaning the earlier eligibility standards remained applicable.
Impact on Borrowers and Employers
The withdrawal of the appeals preserves the status quo for teachers, nurses, social workers, and other public-service employees who feared losing employer eligibility under the rejected rule. By keeping the original criteria, the decision removes the risk that an employer could be barred from PSLF based on the political content of its work, thereby protecting the loan-forgiveness pathway for millions of public-service workers.
Official Statements & Responses
The Justice Department’s brief filing offered no substantive comment beyond the procedural withdrawal.