The Trump administration has given up its legal fight over changes to the Public Service Loan Forgiveness program, known as PSLF. The Justice Department on Wednesday agreed to drop its appeal, with little explanation, The Hill reported. 1
PSLF forgives federal student loans for people who work in government and nonprofit jobs after 10 years of payments. 1 The Education Department had wanted to limit who could qualify. A judge blocked that move over the summer. 1
What the rule would have done
The rule would have made borrowers ineligible if their employer was deemed to have a "substantial illegal purpose." California Attorney General Rob Bonta, a Democrat, said that vague standard could reach lawful activity. His examples were legal services for immigrants, gender-affirming care for minors, diversity programs and civil protest. 2
The Hill reported that the department had sought to bar people at nonprofits who worked on immigration rights and other left-leaning issues. 1
The court ruling
On June 30, 2026, the U.S. District Court for the District of Massachusetts ruled against the rule in a case brought by a coalition of 22 attorneys general. They sued in November 2025. 2 The court found the regulations were contrary to law, exceeded the department's legal authority, were arbitrary and capricious, and violated the First Amendment. 2
The Justice Department first appealed, then reversed course this week. The court filing said each side would pay its own legal fees. It gave no other reason. 1
The Trump administration’s attempt to weaponize public service loan forgiveness against organizations it disagrees with was anti-democratic and unlawful from the start. This is a significant victory for millions of Americans who have dedicated their careers to public service,
Bonta made a similar point when the ruling came down in June. 2
Today's decision is a strong rebuke of the Trump Administration's continued efforts to weaponize the federal government.
What happens next
With the appeal dropped, the ruling that blocked the rule appears to stand. That is an analysis of the filing, not a statement from the court. The Hill did not say whether the administration might try new rules. 1
The Hill noted that the PSLF rule was only one of several student loan changes. The Education Department has successfully changed loan limits and cut the number of repayment plans. It also made a deal with the Treasury Department to take over the student loan portfolio. 1
That matters because many people planned their careers around a promise: ten years of service, then forgiveness. Bonta said millions of Americans took on deep financial burdens based on that promise. 2 Nurses, first responders, teachers and military personnel are among those who use the program. 2
The Record
- A coalition of 22 attorneys general sued over the Education Department's PSLF rule (filed in November 2025; exact day not given) 2
- A federal court in Massachusetts ruled the PSLF rule unlawful and blocked it 2
- The Justice Department agreed to drop its appeal, with each side paying its own legal fees 1
Sources
- The Hill, “Trump administration abandons appeals in fight over student loan forgiveness program” (2026-10-22). thehill.com/homenews/education/6164998-public-service-loan-f
- California Attorney General's Office, “Attorney General Bonta secures total win for public servants as court fully vacates rule” (2026-06-30). oag.ca.gov/news/press-releases/attorney-general-bonta-secure
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