Two federal judges have blocked the Trump administration from enforcing new restrictions on a federal student loan forgiveness program, preventing changes that would have denied debt relief to some public service workers based on their employers' activities.
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The rulings, issued on Tuesday by federal judges in Massachusetts and Washington, D.C., came one day before the revised eligibility rules for the Public Service Loan Forgiveness (PSLF) program were due to take effect.
Federal judges halt overhaul before new restrictions take effect
The administration had sought to overhaul the program by excluding borrowers employed by organizations deemed to have a "substantial illegal purpose," arguing the changes would ensure the program supports organizations aligned with its priorities.
More than 20 states and a coalition of nonprofit organizations filed separate lawsuits, arguing the new rule would allow the Department of Education to deny loan forgiveness based on political or ideological disagreements.
The challengers said the policy could be used against organizations involved in areas such as transgender healthcare and immigration advocacy.
States and nonprofits challenge new eligibility rules
In Massachusetts, U.S. District Judge Myong Joun ruled that the Education Department lacked the legal authority to impose the new restrictions. He also said the rule could violate the First Amendment by discouraging protected speech and forcing the administration's viewpoints on employers.
"The Department cannot create new criminal prohibitions through rulemaking," Joun wrote. He added that the evidence showed the final rule had already "chilled protected speech."
Separately, U.S. District Judge Amir Ali in Washington, D.C., blocked the rule in a lawsuit brought by four nonprofit organizations that advocate for immigration rights and other causes.
Administration defends policy
Education Department Under Secretary Nicholas Kent said the administration was reviewing its legal options following the rulings.
In a statement, Kent said the PSLF program was designed to support public service rather than "subsidize organizations that engage in terrorism, facilitate illegal immigration, or support the mutilation of children."
Congress created the PSLF program in 2007 to encourage graduates to work in public service by forgiving eligible federal student loans after 10 years of qualifying employment. More than one million borrowers have received loan forgiveness through the program.
The Trump administration has argued that some organizations have exploited the program in ways that undermine U.S. values and national security.
Existing program remains in place
An executive order signed by President Donald Trump last year directed the education secretary to narrow eligibility for the program by excluding organizations involved in activities the administration considered unlawful.
The Education Department's final rule listed activities including aiding illegal immigration, supporting terrorism or trafficking, and facilitating what it described as the "chemical and surgical castration or mutilation of children."
The two court rulings leave the current PSLF program unchanged while the legal challenges continue, marking another setback for the Trump administration's efforts to reshape federal student loan policy.
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Adapted by ASEAN Now. Source 2 July 2026