Student-loan borrowers win as Trump drops legal battle to narrow a major forgiveness program for public servants

Student-loan borrowers pursuing a major forgiveness program got a rare legal win.

On Wednesday, the Trump administration agreed to drop two of its appeals of a June ruling that had blocked its plan to narrow eligibility for the Public Service Loan Forgiveness program, which forgives student debt for government and nonprofit workers after 10 years.

The Education Department intended to implement a plan on July 1 to exclude employers from PSLF who did not align with the administration’s definition of “public service,” listing actions like assisting with gender-affirming care or ‘acts of terrorism.

A judge ruled at the end of June that the plan was unlawful and would not take effect.

This followed a series of lawsuits filed by advocacy groups and nonprofits, including Student Defense, which said the education secretary did not have the authority to roll out those changes.

The administration appealed the ruling at the end of August.

With the appeal set to be dismissed, borrowers will not face any immediate changes to PSLF.

Another appeal in a separate PSLF lawsuit is still pending. “The Trump administration’s attempt to weaponize public service loan forgiveness against organizations it disagrees with was anti-democratic and unlawful from the start,” Dan Zibel, chief counsel at Student Defense, said in a statement. “This is a significant victory for millions of Americans who have dedicated their careers to public service.” The Education Department did not immediately respond to a request for comment from Business Insider.

Undersecretary of Education Nicholas Kent previously said that the rule had been intended to “ensure federal benefits go to our Nation’s teachers, first responders, and civil servants who tirelessly serve their communities.” Borrowers pursuing PSLF are still facing challenges.

The Education Department recently removed some borrowers’ payments toward forgiveness, citing Biden-era coding errors.

Others have reported delays getting their payments counted toward relief, leaving them in limbo.

A department spokesperson previously said that the agency “remains committed to ensuring that every qualifying payment is properly credited to a borrower’s account.” Have a story to share about student loans?

Contact this reporter at asheffey@businessinsider.com.