PSLF employer rule fight winds down: the government stays silent, advocates cheer and borrowers get clarity

The Trump administration’s attempt to narrow Public Service Loan Forgiveness (PSLF) by disqualifying some employers appears to be finished in court, and the government isn’t saying why it gave up.

After the Justice Department dropped its appeals this week, the Education Department referred questions about the cases to the Justice Department, which declined to comment, Government Executive reported on Oct. 23. The filings themselves offered no explanation either, according to CBS News and The College Investor.

This article is general information, not financial or legal advice. Check your own situation with your loan servicer or StudentAid.gov.

What’s new since the appeals were dropped

The newest developments are reactions and silence:

• No explanation from the government. The dismissals were filed as short joint agreements with no stated reason, and each side agreed to pay its own fees and costs, The College Investor reported.
• Unions and advocates are calling it a win. “We’re glad the administration is now following the law and abandoning this illegal scheme,” said Patrick Moran, president of the American Federation of State, County and Municipal Employees (AFSCME), in a statement quoted by Government Executive.
• Nonprofits say borrowers have certainty. “With the appeal dismissed, the court’s order vacating the rule stands, and PSLF remains as Congress designed it,” National Council of Nonprofits CEO Diane Yentel said, per CBS News.

Where the three PSLF cases stand

There were three lawsuits against the rule, and two federal judges struck it down on June 30. Here is where each case stands, based on The College Investor’s docket summary and the state attorneys general:

As of Oct. 21, The College Investor reported, the states’ appeal was still on the docket with a government brief due Nov. 4. California Attorney General Rob Bonta’s office said on Oct. 22 that the administration had since dropped that appeal too, which “concedes the case” and leaves the lower-court ruling in place. We have not seen a court order or Education Department statement confirming the final dismissal.

What the rule would have done

The rule, finalized in October 2025, would have let the Education Department cut off PSLF credit for workers at government or nonprofit employers it found to have a “substantial illegal purpose.” CBS News said the listed activities included violating immigration laws, terrorism, trafficking and what the rule called the “chemical and surgical castration or mutilation of children.”

When it was announced, Under Secretary of Education Nicholas Kent said the goal was “supporting public servants who strengthen their communities and serve the public good, not benefiting businesses engaged in illegal activity that harms Americans,” CBS reported. Critics argued it would let officials punish organizations for their politics. Judge Myong J. Joun in Massachusetts found the rule violated the First Amendment and exceeded the department’s authority, and Judge Amir H. Ali in Washington also ruled it should be vacated, Government Executive reported.

What it means for your student loans

For people working toward PSLF, the practical answer hasn’t changed: the existing rules stay in place. PSLF cancels remaining federal student loans for people in qualifying public service jobs after 120 qualifying monthly payments, roughly 10 years. CBS News, citing the Education Data Initiative, said almost 720,000 federal student loans were discharged through the program between 2018 and mid-2025.

The College Investor’s checklist for borrowers:

1. Keep certifying employment. Submit the PSLF form at least once a year and after any job change.
2. Don’t switch jobs because of this rule. Your employer can’t be disqualified under the vacated rule.
3. Stay on a qualifying repayment plan. The outlet lists the Repayment Assistance Plan, IBR, PAYE and ICR as counting toward PSLF.

FAQ

Earlier coverage: PSLF update: Education Department drops its last appeal, states say, ending the fight over the employer rule (Oct 23)