Judges strike down Trump administration student loan forgiveness overhaul

Two federal judges on Tuesday blocked the Trump administration from implementing new restrictions on a student loan forgiveness program that would have barred public service workers from receiving debt relief if their employers are deemed to have a “substantial illegal purpose.”

The rulings, issued by Biden-appointed judges in Massachusetts and Washington, D.C., came just one day before the new eligibility rules were set to take effect.

The Trump administration had sought to add new rules to the Public Service Loan Forgiveness (PSLF) program as part of its targeted overhaul of government programs that do not align with the administration’s priorities.

More than 20 states, along with a coalition of nonprofit groups, challenged the rule in a pair of lawsuits, arguing it would allow the Department of Education to target organizations that support causes considered disfavorable to the administration, including transgender healthcare and immigration advocacy.

In Massachusetts, U.S. District Judge Myong Joun struck down the changes, finding the agency lacked legal authority and could potentially violate the First Amendment, as well as threaten to force the administration’s viewpoints on employers.

“The Department cannot create new criminal prohibitions through rulemaking,” Joun wrote in his opinion, adding: “Indeed, the record further demonstrates ‌that the ⁠Final Rule has already chilled protected speech.”

U.S. District Judge Amir Ali in Washington, D.C., separately struck down the rule in a case brought on by four nonprofits that advocate for immigration rights, among other issues.

Under Secretary of Education Nicholas Kent said the agency is evaluating next steps for its “commonsense policy.”

“The Public Service Loan Forgiveness Program is intended to support Americans who serve the public good, not to subsidize organizations that engage in terrorism, facilitate illegal immigration, or support the mutilation of children,” he said in a statement.

Congress established the PSLF in 2007 to encourage college graduates to pursue careers in public service by forgiving their federal student loans after 10 years of qualifying employment in the field. More than 1 million Americans have had their loans canceled as a result.

The Trump administration has argued the program is being exploited by organizations to undermine American values and national security.

In an executive order last year, President Trump directed the education secretary to narrow the program’s eligibility and exclude groups that engaged in activities deemed illicit.

The Education Department’s final rule defined those activities to include aiding illegal immigration, supporting terrorism and trafficking, and facilitating the “chemical and surgical castration or mutilation of children.”

The rulings leave the existing PSLF program intact for now and mark more legal setbacks for the Trump administration as it seeks to reshape federal student loan policy.

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