Trump Administration Seeks to Restrict Public Service Loan Forgiveness Eligibility

The Department of Education filed an appeal on Thursday challenging a June court ruling that stopped its effort to restrict eligibility for the Public Service Loan Forgiveness (PSLF) program. The contested rule, slated for a July 1 rollout, would have excluded employers that, in the administration's view, performed activities like providing gender-affirming care, aiding illegal immigration, or advancing terrorism, with the education secretary deciding eligibility.

Employers could contest the designation, but borrowers tied to disqualified employers would lose credit toward forgiveness unless they changed jobs. Nonprofit and advocacy groups sued, claiming the rule was driven by politics and would damage public-service employees, and the district judge agreed, noting Congress had not granted such authority. The appeal means the current PSLF framework remains in place for borrowers while the litigation proceeds. Aaron Ament of Student Defense said the group will argue before the DC Circuit to uphold the ruling, while Undersecretary Nicholas Kent previously defended the rule as protecting federal benefits for teachers, first responders and civil servants.