The Trump Administration has dropped its appeal of a federal court decision that blocked a rule restricting eligibility for Public Service Loan Forgiveness (PSLF), effectively conceding the case. The Department of Education's rule would have allowed the administration to strip PSLF eligibility from employees of government and nonprofit organizations it deemed to have a "substantial illegal purpose."
California Attorney General Rob Bonta and 21 other state attorneys general sued the Trump Administration in November 2025 over the rule. The U.S. District Court for the District of Massachusetts vacated the rule in June 2026, finding it contrary to law, arbitrary and capricious, and a violation of the First Amendment. By dropping its appeal, the administration allows the court's ruling to stand.
The administration's criteria for revoking PSLF eligibility included providing legal services to immigrants, offering gender-affirming care to minors, participating in diversity, equity, and inclusion initiatives, and engaging in civil protest and assembly.
Congress created PSLF in 2007 with bipartisan support to encourage college graduates to work in the public sector, where salaries are typically lower than in private industry. The program forgives remaining federal student loan debt after 10 years of qualifying payments and helps nonprofits, the armed forces, and federal, state, and local governments recruit and retain skilled workers.
"The Trump Administration tried and failed to turn a bipartisan promise into a political weapon, threatening the financial futures of hardworking Americans who have devoted their lives to the public good," Bonta said.