The Trump administration has ended its legal effort to change the Public Service Loan Forgiveness (PSLF) program, according to court filings on Wednesday.
The Department of Justice abandoned two appeals after federal judges ruled in June that the administration’s proposed overhaul of the PSLF program overstepped its authority and could be used for political retribution.
Advocates for student loan borrowers welcomed the decision. "The Trump administration’s attempt to weaponize public service loan forgiveness against organizations it disagrees with was anti-democratic and unlawful from the start," Dan Zibel, an attorney for the group Student Defense, stated. "This is a significant victory for millions of Americans who have dedicated their careers to public service."
The PSLF program, established in 2007, aims to encourage careers in public service by forgiving federal student loans for qualified employees after 10 years of payments. However, the Trump administration sought to implement new rules that would have given the Education Secretary the power to remove employers from the program if their work was deemed to have a "substantial illegal purpose." Critics argued this vaguely worded provision could disproportionately affect borrowers working for organizations supporting undocumented immigrants or transgender youth, potentially impacting those employed by public schools, hospitals, and legal aid groups.
These changes represented a significant reworking of a program that has already canceled loans for over one million Americans. The legal challenges arose just before the new regulations were set to take effect in July. U.S. District Judge Myong Joun in Massachusetts vacated the Education Department’s changes, citing concerns that they exceeded the agency’s power and potentially infringed upon First Amendment free speech protections. A separate but similar ruling was issued on the same day by District Judge Amir Ali in Washington in a case brought by nonprofit organizations.