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Trump administration drops legal fight to overhaul student loan forgiveness program
Borrowers will face no immediate changes to Public Service Loan Forgiveness after a judge blocked the plan and the Education Department dropped two appeals.
On Wednesday, the Trump administration dropped two appeals of a June ruling that had blocked its plan to narrow Public Service Loan Forgiveness eligibility, which forgives student debt for government and nonprofit workers after 10 years.
The Education Department had intended to exclude employers not aligning with its definition of 'public service,' listing actions like assisting with gender-affirming care or 'acts of terrorism,' under a rule that empowered Education Secretary Linda McMahon.
Federal judges Myong Joun and Amir Ali ruled in June that the plan overstepped agency power and threatened First Amendment protections, following lawsuits filed by more than 20 states and nonprofit groups.
Dan Zibel, chief counsel at Student Defense, called the outcome a 'significant victory for millions of Americans,' and with the appeals dismissed, borrowers face no immediate changes to PSLF.
While these appeals were dropped, another legal challenge regarding PSLF remains pending, and the Department recently removed some borrowers' payments toward forgiveness, citing Biden-era coding errors.