A pair of federal judges ruled against the Trump administration’s revisions to the Public Service Loan Forgiveness program, asserting that the changes overstepped legal boundaries and could infringe on free speech protections.
WASHINGTON (AP) — In a significant legal development, two federal judges issued rulings on June 30, 2026, that halted the Trump administration’s recent overhaul of the Public Service Loan Forgiveness (PSLF) program. The rulings were delivered on the eve of the new rules’ intended implementation date and came in response to lawsuits filed by a coalition of over 20 states, nonprofit organizations, and municipal governments.
U.S. District Judge Myong Joun, presiding over the case in Massachusetts, found that the U.S. Department of Education exceeded its authority with the proposed changes, stating that they threatened to violate First Amendment rights. Similarly, District Judge Amir Ali in Washington, D.C., affirmed this perspective in a parallel case involving nonprofit groups challenging the new regulations.
Under Secretary of Education Nicholas Kent responded to the rulings by indicating that the department is currently assessing its options. “The Department stands behind this commonsense policy to ensure that taxpayer dollars are never used to subsidize illegal activities,” Kent stated in a written communication.
Background on the Public Service Loan Forgiveness Program
Created by Congress in 2007, the PSLF program was designed to incentivize college graduates to pursue careers in public service, particularly in government and nonprofit sectors. The program promises to forgive the federal student loans of eligible participants after ten years of qualifying employment. Over the years, it has provided relief to more than 1 million borrowers who have dedicated their careers to serving their communities.
Trump Administration’s Proposed Changes
In 2022, the Trump administration proposed significant modifications to the PSLF program, introducing new eligibility criteria that would exclude employees of organizations deemed to have a “substantial illegal purpose.” This initiative specifically targeted certain nonprofit and government entities whose missions contradicted the administration’s political priorities. The changes granted the Secretary of Education the authority to deny loan forgiveness to organizations involved in activities such as human trafficking, illegal immigration, or supporting terrorist organizations. Notably, the administration’s definition of “chemical castration” was controversial, encompassing practices like hormone therapy or puberty-blocking drugs.
The proposed revisions sparked widespread criticism from various stakeholders, including advocates for public service workers and nonprofit organizations. Critics argued that the changes would undermine the original intent of the PSLF program, which aimed to attract graduates to lower-paying public service roles by providing loan forgiveness as an incentive.
Judicial Findings
Judge Joun’s ruling emphasized that the new regulations could impose the administration’s political views on employers, thereby infringing on the free speech rights of organizations and individuals. The judge criticized the Department of Education for not adequately linking its definitions of illegal activity to established criminal statutes. “The Department cannot create new criminal prohibitions through rulemaking,” Joun asserted.
Moreover, the judge questioned the necessity of the sweeping changes given that the Department’s own estimates indicated that fewer than ten employers might be barred from the program annually due to illegal activities. “The Department offers no explanation for why a Final Rule with such sweeping consequences is necessary to address the possibility that, at most, ten employers each year may be engaging in illegal activity,” Joun noted in his decision.
The legal challenges against the Trump administration’s changes garnered substantial support, with more than 100 briefs filed by various groups opposing the alterations. In contrast, no supportive briefs were submitted on behalf of the administration’s proposals.
Reactions from Advocacy Groups
Diane Yentel, president and CEO of the National Council of Nonprofits, one of the plaintiffs in the Massachusetts case, hailed the ruling as a victory for both nonprofit organizations and the communities they serve. “This decision is a win for the communities that depend on local nonprofits and for the workers who serve them,” Yentel stated. Similarly, Aaron Ament, president of Student Defense, a plaintiff in the Washington case, described the ruling as a triumph for student loan borrowers, asserting that public servants should not fear repercussions based on their employer’s mission or perceived political affiliations.
As the Department of Education evaluates its next steps in light of these rulings, the legal landscape surrounding the PSLF program remains critical for the future of public service employment and student loan forgiveness in the United States.
