What Does the Trump Administration Dropping Its PSLF Appeal Mean for Student Loan Borrowers?

The Trump administration on Wednesday agreed to drop two appeals of a court ruling that blocked its plan to narrow who qualifies for Public Service Loan Forgiveness.

The move means borrowers in the program will not face immediate changes to their eligibility, Business Insider reported. The Washington Post also reported that the Justice Department dropped the fight.

PSLF forgives the remaining federal student debt of government and nonprofit workers after 10 years of qualifying payments.

The Education Department had planned to start a rule on July 1 that would exclude employers whose work did not fit the administration’s definition of “public service.” The listed examples included assisting with gender-affirming care and “acts of terrorism.”

A federal judge ruled at the end of June that the plan was unlawful and could not take effect, according to Business Insider. Advocacy groups and nonprofits, including Student Defense, had sued, arguing the education secretary lacked the authority to make the change.

The administration appealed in late August. With that appeal now set to be dismissed, the June ruling stands for those cases.

The Fight Is Not Fully Over

Another appeal in a separate PSLF lawsuit is still pending, Business Insider noted, so the legal question is not completely settled.

Undersecretary of Education Nicholas Kent previously said the rule was meant to “ensure federal benefits go to our Nation’s teachers, first responders, and civil servants who tirelessly serve their communities.”

Dan Zibel, chief counsel at Student Defense, called the administration’s effort “anti-democratic and unlawful from the start” in a statement reported by Business Insider. The Education Department did not immediately respond to Business Insider’s request for comment.

Borrowers pursuing forgiveness still face problems. The department recently removed some payments from borrowers’ forgiveness counts, citing Biden-era coding errors, and others report delays in getting payments credited.

A department spokesperson previously said the agency “remains committed to ensuring that every qualifying payment is properly credited to a borrower’s account.”

The PSLF news comes as the administration reportedly prepares a tougher approach to borrowers who have stopped paying. Straight Arrow News, citing reporting from The Washington Sun, said about 10 million Americans in default could face wage garnishment and seized tax refunds.

No official notice of that plan has gone to borrowers. Roughly 1 in 5 federal student loan borrowers are in default, meaning more than nine months behind, according to the report.

The Education Department launched a Defaulted Loans Support Center at studentaid.gov less than a month ago, the outlet reported. It lets borrowers in default apply online for rehabilitation or consolidation and make payments.

Borrowers working toward PSLF should keep certifying their employment and checking that their qualifying payment counts are accurate, since the remaining appeal could still change the picture.

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