WASHINGTON — Two federal judges have struck down the Trump administration's overhaul of the Public Service Loan Forgiveness program, ruling the U.S. Department of Education exceeded its legal authority by imposing new restrictions that would have taken effect on July 1.
In separate decisions issued Tuesday, U.S. District Judge Myong J. Joun in Massachusetts and U.S. District Judge Amir Ali in Washington, D.C., blocked the revised regulations, which would have allowed the Education Department to deny loan forgiveness to borrowers employed by organizations deemed to have a "substantial illegal purpose." The rulings came one day before the new rules were scheduled to take effect.
The challenged regulations would have altered eligibility for the Public Service Loan Forgiveness (PSLF) program, which Congress established in 2007 to cancel remaining federal student loan balances for borrowers who make 120 qualifying monthly payments while working full time for government agencies or eligible nonprofit organizations.
Joun ruled that the Education Department had exceeded the authority granted to it by Congress and said portions of the rule threatened First Amendment protections by allowing the government to penalize organizations based on their activities or viewpoints. He also criticized the department's definition of prohibited conduct as overly vague and said the agency had failed to justify the need for such sweeping changes.
Ali reached a similar conclusion in a separate lawsuit brought by nonprofit organizations, likewise finding that the department had overstepped its statutory authority in revising the program's eligibility standards.
The lawsuits were filed by more than 20 states, cities, nonprofit organizations and advocacy groups, which argued the revised rules could be used to exclude employers supporting causes such as immigration assistance, diversity initiatives or gender-affirming healthcare. They contended the changes would politicize a long-standing federal benefit intended to encourage careers in public service.
The Education Department said it was reviewing the rulings and evaluating its next steps. In a statement, Under Secretary of Education Nicholas Kent said the department continued to support what it described as a policy intended to ensure taxpayer funds were not used to subsidize illegal activities.
Plaintiffs welcomed the decisions, saying they preserved protections for teachers, healthcare workers, military personnel, first responders and nonprofit employees who rely on the loan forgiveness program after a decade of qualifying public service.
Unless the rulings are overturned on appeal, the existing PSLF eligibility rules remain in effect while the litigation continues.
