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Policy and Advocacy Public Service Loan Forgiveness Article
Author: Monica Konaté
Author: Monica Konaté
Policy and Advocacy Public Service Loan Forgiveness Article

Public Service Loan Forgiveness Remains Intact After Administration Drops Appeal

Key takeaways

  • The Department of Justice (DOJ) has dropped its appeal of federal court rulings that blocked changes to Public Service Loan Forgiveness (PSLF).
  • The courts found that the Department of Education exceeded its authority by attempting to limit employer eligibility beyond what Congress established in law.
  • Government employers and qualifying 501(c)(3) nonprofit organizations remain eligible employers under existing PSLF rules.
  • The decision preserves certainty for borrowers pursuing loan forgiveness through public service careers, and for employers that rely on PSLF to recruit and retain talent.

For nearly two decades, the Public Service Loan Forgiveness (PSLF) program has helped public servants manage the cost of higher education while pursuing careers that benefit communities across the country. Established by Congress in 2007 with bipartisan support, PSLF promises federal student loan forgiveness to eligible borrowers who work in public service and make 120 qualifying monthly payments.

Last year, however, the Trump Administration issued regulations that would have allowed the Department of Education (ED) to remove employers from PSLF eligibility if they were deemed to have a “substantial illegal purpose.” Critics argued that the rule exceeded ED’s legal authority and would introduce uncertainty into a program that has become a vital lifeline for public servants and an important recruiting and retention tool for government agencies, nonprofit organizations, schools, hospitals, military service members, and legal aid providers.

Why Did the Trump Administration Propose Changes to PSLF?

In March 2025, President Trump signed an executive order (EO) directing ED to revise the PSLF program so that organizations that it deemed to have a substantial illegal purpose would not be eligible to participate. Shortly after, ED issued proposed regulations based on the EO, generating significant concern among higher education, borrower, and nonprofit stakeholders, who argued that Congress had already clearly defined which employers qualify for PSLF and had not granted ED authority to impose additional eligibility criteria.

As the rulemaking process unfolded, organizations, including AccessLex Institute®, submitted formal comments raising concerns about the proposal's legal foundation, administrative feasibility, and potential impact on borrowers. AccessLex also helped lead the response through its co-leadership of the PSLF Coalition, a group of more than 120 organizations representing public service employers and professionals across the country.

In these comments, AccessLex argued that the Higher Education Act expressly identifies government employers and 501(c)(3) nonprofit organizations as qualifying employers and that any effort to narrow those categories should come from Congress rather than through agency regulation. AccessLex also warned that the proposal could create uncertainty for borrowers who rely on PSLF when making long-term career decisions and could subject employer eligibility determinations to shifting political priorities.

Why Did Federal Courts Block the PSLF Rule?

Those concerns ultimately became central to litigation efforts challenging the final rule, which was published in October 2025 and set to take effect on July 1, 2026. In June 2026, federal courts invalidated the regulation, concluding that ED had exceeded its statutory authority and that the rule could not stand under established administrative law principles.

Although the Department of Justice initially appealed this decision, it announced in October 2026 that it would abandon the appeals, leaving the lower courts’ rulings in place and the PSLF program intact.

What This Means for PSLF Borrowers and Public Service Employers

For public servants and the communities they serve, the outcome preserves a program that Congress created to encourage careers in public service. For AccessLex, it underscores the importance of ensuring that policy changes remain grounded in statute and implemented in a manner that provides certainty to borrowers who have built their careers around the promise of PSLF.

AccessLex will continue to advocate for policies that strengthen, rather than undermine, access to loan forgiveness and that preserve the ability of professionals to pursue careers in public service.

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