The Trump administration moved Wednesday to end its legal fight to overhaul the Public Service Loan Forgiveness program. The Justice Department dropped two appeals in single-sentence joint agreements providing that each side would pay its own fees, after federal judges ruled in June for advocates who challenged the changes.
The program aims to attract workers to government, public schools, fire and police departments, public hospitals and nonprofits by forgiving loans after a decade of payments. Last fall, the administration wrote a new rule empowering Education Secretary Linda McMahon to remove employers from the program if she decided their work had a substantial illegal purpose.
The rule was aimed at employers that support undocumented immigrants or transgender youth, potentially affecting borrowers at schools, public hospitals and legal aid groups. Just before it was to take effect in July, U.S. District Judge Myong Joun in Massachusetts vacated the changes, saying they overstepped agency power and threatened First Amendment speech protections in lawsuits brought by more than 20 states and a coalition of nonprofit groups and cities. On the same day, District Judge Amir Ali in Washington issued a similar ruling in a case brought by nonprofit organizations.
Federal officials provided no explanation for dropping the appeals. Advocates praised the outcome, with Dan Zibel, an attorney for Student Defense, calling it a significant victory for people who built careers in public service. The program at issue has canceled loans for more than 1 million Americans.