Major Victory for PSLF as Trump Administration Abandons Proposed Restrictions

The Public Service Loan Forgiveness (PSLF) Coalition welcomes the Department of Justice’s decision to drop its appeals of federal court rulings blocking the Trump administration’s restrictions on Public Service Loan Forgiveness. The decision marks a significant victory for the communities served by the employers impacted by this regulation, and the millions of public service employees dedicated to serving them. 

The Department of Education’s rule would have given the Secretary of Education unlawful, and extrajudicial, authority to disqualify employers from participating in PSLF if she determined the employer engaged in activities she deemed as having a “substantial illegal purpose.” These restrictions threatened to create significant uncertainty for borrowers working in schools, hospitals, nonprofit organizations, and other public service institutions, potentially jeopardizing their eligibility for loan forgiveness based on the activities of their employers. 

Two federal district court judges found that the Secretary lacked the statutory authority to disqualify otherwise eligible employers from participating in PSLF and vacated the rule. Judge Myong Joun, sitting on the U.S. District Court for Massachusetts said it best, and reflected comments as submitted by the PSLF Coalition, in holding that “the final rule is contrary to law and promulgated in excess of statutory authority, is arbitrary and capricious and violates the First Amendment.” 

Public service workers should not have to worry that changing political priorities could jeopardize their eligibility for loan forgiveness. For teachers, nurses, public interest attorneys, social workers, and countless others, PSLF makes it possible to pursue careers serving communities that need them most. We are relieved that these harmful restrictions will not move forward, and that borrowers can continue their public service with greater confidence in the program. 

The PSLF Coalition extends its gratitude to the thousands of borrowers, advocates, coalition partners, and organizations that spoke out against the proposed restrictions, submitted more than 10,000 public comments, shared personal stories, and participated in the litigation challenging the rule. Their collective advocacy helped demonstrate the real-world consequences these restrictions would have had for public service workers and the communities they serve. 

While this decision represents a major victory, continued advocacy is necessary to ensure PSLF remains accessible, predictable, and fair. The Coalition will continue fighting for policies that protect borrowers, strengthen program administration, and remove unnecessary barriers to loan forgiveness. The PSLF Coalition remains committed to ensuring that every eligible public service worker can access the loan forgiveness they have earned and that PSLF continues to support the workforce our communities depend on.