Justice Department Drops Appeals in Public Service Loan Forgiveness Case

The United States Justice Department has dropped its appeals in two court rulings that previously blocked eligibility restrictions for the Public Service Loan Forgiveness program. Court documents released on Wednesday confirmed that both appeals have been dismissed, with each side agreeing to pay its own fees.

The dropped appeals stem from June court decisions that struck down the Trump administration's attempt to alter the federal debt relief program. The initiative, established in 2007 under President George W. Bush, cancels remaining federal student debt for public-sector and nonprofit employees who complete 10 years of qualifying service and 120 monthly payments.

The administration had previously sought to exclude certain organizations from participating based on activities deemed unlawful, including actions related to immigration, gender-affirming care, protests, and reproductive care for minors. An executive order signed in March 2025 directed the Education Department to implement these restrictions, which were later formalized into a rule.

Within days of the rule's publication, 22 states, the District of Columbia, municipal governments, labor unions, and nonprofit employers filed lawsuits challenging the policy. On June 30, 2026, federal judges in Massachusetts and Washington, D.C., struck down the restrictions.

The Massachusetts court ruled that the policy exceeded the Education Department's authority and violated the First Amendment by conditioning eligibility on an organization's speech and viewpoints. The D.C. court similarly found that the rule went beyond the department's statutory authority under the Higher Education Act.

Because both federal courts vacated the rule rather than merely pausing it, the original eligibility criteria for the loan forgiveness program have remained fully in effect. To date, the program has provided debt relief to more than one million eligible Americans, including educators, nurses, social workers, and other public employees.