Student Loan Forgiveness Is Safe For Now After Two Big Court Losses For Trump Administration

Key Points:

• Two federal courts ruled against the Education Department’s new regulations that would have allowed disqualification of organizations from the Public Service Loan Forgiveness (PSLF) program, blocking the Trump administration’s attempt to restrict student loan forgiveness.
• The proposed rules aimed to disqualify organizations engaged in activities deemed “substantial illegal purpose,” such as certain protests or providing medical services to transgender youth, which would have made their employees ineligible for loan forgiveness.
• Courts found that the Education Department overstepped its authority, as Congress did not grant the power to disqualify employers or alter the statutory definition of qualifying public service jobs for PSLF.
• Both courts vacated the new regulations, allowing student loans to continue being forgiven under PSLF for eligible borrowers working in qualifying employment, marking a significant victory for borrowers and public service organizations.
• The Education Department is expected to appeal the rulings, meaning the legal battle over student loan forgiveness restrictions may continue, creating ongoing uncertainty for borrowers enrolled in the program.