Trump administration drops appeals in public service loan forgiveness dispute

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Trump drops loan forgiveness appeals

Highlights

The Trump administration dropped two appeals against a June court ruling that blocks new restrictions on Public Service Loan Forgiveness eligibility.
The court decision prevents exclusion of certain employers, including gender-affirming care groups and others, from PSLF program access.
Despite this legal win, PSLF borrowers continue to experience operational problems, including missing qualifying payments and delays caused by Biden-era coding errors.

Court ruling keeps current PSLF rules in place

As first reported by Business Insider, the administration agrees to drop two appeals of a June decision that prevents the Education Department from narrowing access to the Public Service Loan Forgiveness program. The department had planned to introduce the changes on July 1, excluding employers that did not fit its definition of public service, including groups involved in gender-affirming care or what it described as acts of terrorism.

A judge rules at the end of June that the plan is unlawful and blocks it from taking effect. The ruling follows lawsuits from advocacy groups and nonprofits, including Student Defense, which argues that the education secretary lacks authority to make those changes.

The administration files its appeal at the end of August, but with the cases now set to be dismissed, borrowers do not face immediate revisions to PSLF eligibility. A separate appeal in another PSLF lawsuit remains pending.

Borrowers still face broader servicing and crediting issues

Dan Zibel, chief counsel at Student Defense, says in a statement that the administration's effort to use the forgiveness program against disfavored organizations is unlawful and anti-democratic. He describes the outcome as a significant victory for millions of Americans working in public service.

The Education Department does not immediately respond to a request for comment. Undersecretary of Education Nicholas Kent previously says the rule is meant to ensure federal benefits go to teachers, first responders and civil servants who serve their communities.

Even with the legal setback for the administration, PSLF borrowers continue to report operational problems. The Education Department recently removes some borrowers' qualifying payments, citing Biden-era coding errors, while others say delays in payment counts are leaving them in limbo; a department spokesperson previously says the agency remains committed to properly crediting every qualifying payment.

Our earlier coverage on an Ontario court case over shoreline work along the Sturgeon River detailed fines and court-ordered payments after damage to endangered Lake Sturgeon habitat and unlawful activity in a conservation reserve. The case highlighted how regulatory enforcement and litigation can quickly translate into concrete penalties and mandated corrective actions for organizations that fail to meet legal requirements.

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