Education Department Drops Two Appeals Over Loan Forgiveness Rule: Court-Vacated Employer Rule Will Not Be Revived
The U.S. Department of Justice on October 21 filed joint stipulations dropping two appeals over new employer-eligibility rules for the Public Service Loan Forgiveness (PSLF) program, according to the Associated Press. The dismissals were set out in single-sentence agreements under which each side pays its own fees, leaving in place two federal court rulings that vacated the rule. Federal officials provided no explanation for the move.
The rule, finalized by the U.S. Department of Education (ED) in October 2025 and set to take effect on July 1, 2026, would have empowered Secretary of Education Linda McMahon to remove employers from the PSLF program if she decided their work had a "substantial illegal purpose." The program forgives the student loans of employees of government agencies, public schools, fire and police departments, public hospitals and nonprofits after a decade of qualifying payments, and it has canceled loans for more than 1 million Americans.
In June 2026, U.S. District Judge Myong Joun in Massachusetts and U.S. District Judge Amir Ali in Washington ruled on the same day to vacate the Education Department's changes, saying the agency had overstepped its authority and that the rule threatened First Amendment free-speech protections. The lawsuits had been filed by more than 20 states and by a coalition of nonprofit organizations and cities; the Washington case was brought by groups including the RFK Center for Justice and Human Rights.
Public Citizen, one of the plaintiff organizations, said the rule had threatened to disqualify as many as 2.5 million federal student loan borrowers from the program. With the two appeals dropped, the program's existing eligibility rules remain in force and borrowers working toward forgiveness do not need to take any new steps. A third appeal, in a companion case brought by 22 states and Washington, D.C., had not been withdrawn as of October 21, with the government's first brief in that case due November 4, according to The College Investor.
Dan Zibel, an attorney for the group Student Defense, said in a written statement that dropping the appeals was "a significant victory for millions of Americans who have dedicated their careers to public service." Cormac Early, lead attorney for the plaintiffs at the Public Citizen Litigation Group, said nonprofit and public service workers can now continue their work without the threat raised by the rule. The Education Department and the Justice Department offered no further comment.
Published by GSM · USA (original Chinese edition)
Photo: 位于华盛顿的美国教育部总部 Lyndon Baines Johnson 大楼北入口（资料图）。照片：G. Edward Johnson 摄，CC BY 4.0，经维基共享资源／File photo: the north entrance of the Lyndon Baines Johnson Department of Education Building, headquarters of the U.S. Department of Education in Washington, D.C. Photo: G. Edward Johnson, CC BY 4.0, via Wikimedia Commons
