Judge blocks Trump administration's plan to limit student-loan forgiveness for public servants

Key facts

• A federal judge blocked the Trump administration's plan to limit the Public Service Loan Forgiveness program.
• The overhaul targeted nonprofits and government organizations whose work did not align with the administration's priorities.
• US District Judge Myong Joun ruled the Education Department's changes overstepped its authority and threatened First Amendment protections.
• The judge stated the department could not create new criminal prohibitions through rulemaking.
• The rule was scheduled to take effect on July 1.

A federal judge has blocked the Trump administration's plan to restrict eligibility for the Public Service Loan Forgiveness (PSLF) program. U.S. District Judge Myong Joun ruled on Tuesday that the Education Department's changes, which were set to take effect on July 1, were unlawful and overstepped the agency's power.

The overhaul targeted nonprofits and government organizations that support causes at odds with the Trump administration’s priorities, such as those involved in "chemical castration" of children or supporting terrorist organizations. Judge Joun stated that the department could not leverage the PSLF program to compel borrowers or employers to conform to policy preferences not enacted by Congress, and that the department failed to connect its definitions of illegal activity to criminal statutes.

"The Department cannot create new criminal prohibitions through rulemaking," Joun wrote. He also questioned the department's rationale, noting its own estimates suggested fewer than ten employers would be barred annually. The PSLF program forgives federal student loans for government and nonprofit workers after ten years of qualifying payments.

Winston Berkman-Breen, legal director at advocacy group Protect Borrowers, which filed the lawsuit with Democracy Forward, stated the decision ensures public servants can continue their work without fear of federal punishment. More than 100 supporting briefs were filed on behalf of groups challenging the rules, with none filed in support of the administration's change.