Trump administration ends legal battle to overhaul student loan forgiveness program
The US Department of Education headquarters at Federal Office Building No. 6, now known as the Lyndon Baines Johnson Department of Education Building, on May 28, 2026 in Washington, DC. In March 2026, it was announced that the downsized Department of
President Donald Trump’s administration dropped a pair of appeals this week involving a planned overhaul of the Public Service Loan Forgiveness Program, which was designed to forgive loans for qualifying public service workers after 10 years’ worth of payments.
Big picture view:
The program was created to boost interest for jobs in federal, state, local or tribal government agencies, including public schools, public universities, military service, first responders, public hospitals, nonprofits and AmeriCorps or the Peace Corps. Through that program, after employees in those fields who received federal direct loans make 120 consecutive on-time monthly payments, the remainder of their loans would be forgiven.
Trump ordered in 2025 that such workers should be disqualified for loan forgiveness if Secretary of Education Linda McMahon determined the organizations they worked for had a "substantial illegal purpose."
In June, federal judges blocked the administration from implementing a new rule that disqualified workers for the program if it decided their employers had a "substantial illegal purpose." Trump has said activist organizations that harm U.S. security and the nation’s values have exploited the program.
U.S. District Judge Myong Joun in Boston agreed with Democratic-led states, cities and nonprofits that argued that the rule would allow the Department of Education to target groups that supported immigration rights, transgender healthcare and other issues the Trump administration does not support.
U.S. District Judge Amir Ali in Washington, D.C. similarly blocked the rule, siding with four nonprofits involved in issues like immigrant rights advocacy.
The Trump administration on Wednesday dropped the two appeals.
What they're saying:
Dan Zibel, an attorney for the group Student Defense, said in a written statement to the Associated Press that the rule was an attempt by the Trump administration to "weaponize public service loan forgiveness against organizations it disagrees with," calling it "anti-democratic and unlawful from the start."
"This is a significant victory for millions of Americans who have dedicated their careers to public service," Zibel said.
Dig deeper:
Since June 2024, data from the U.S. Department of Education shows that there have been 3.7 million applications processed for the loan program. Data from the department’s Federal Student Aid PSLF data page suggests the government has discharged a total of $87.6 billion in student loans through the program since that time.
The Source: Information in this story came from U.S. Department of Education, the White House, the Associated Press and Reuters. This story was reported from Orlando.