Trump Administration Ends Legal Bid to Overhaul Student Loan Forgiveness

The Trump administration has ended its legal challenge to a popular student loan forgiveness program that aids public service workers. The Department of Justice withdrew two appeals on Wednesday that aimed to overhaul the Public Service Loan Forgiveness (PSLF) program.

Federal judges had previously ruled in favor of advocates, finding that the administration's proposed changes risked political retribution against organizations. The DOJ provided no explanation for dropping the appeals, but advocates celebrated 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," said Dan Zibel, an attorney for the group Student Defense. "This is a significant victory for millions of Americans who have dedicated their careers to public service."

The PSLF program, established to encourage careers in public service, forgives student loans for qualified employees of government, public schools, fire and police departments, public hospitals, and nonprofits after 10 years of payments.

Last fall, the administration introduced a rule 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 rule could target employers who assist undocumented immigrants or transgender youth, potentially impacting borrowers working in sectors like education, public healthcare, and legal aid.

The proposed overhaul would have significantly altered the program, which has already canceled loans for over one million Americans. However, just before the changes were set to take effect in July, a U.S. District Court judge in Massachusetts vacated the Education Department's modifications. The judge ruled that the changes exceeded the agency's authority and could infringe upon First Amendment protections for free speech. This decision stemmed from lawsuits filed by more than 20 states, nonprofit groups, and cities.

On the same day, a judge in Washington issued a similar ruling in a case brought by nonprofit organizations.