Federal judges block overhaul of public service student loan forgiveness
Two federal judges on Tuesday blocked the Trump administration's changes to the Public Service Loan Forgiveness (PSLF) program, ruling the Education Department went beyond its legal authority by changing who qualifies for the program.
The decisions, issued in Massachusetts and Washington, D.C., came one day before the new rules were set to take effect.
Congress created the PSLF program in 2007 to encourage people to work in government and nonprofit jobs by forgiving their federal student loans after 10 years of qualifying public service.
Last year, the Trump administration approved new rules that would have allowed the Education Department to deny loan forgiveness to workers whose employers were found to have a "substantial illegal purpose."
The policy targeted nonprofit and government organizations whose work conflicts with the administration's priorities. It gave the education secretary the power to exclude employers involved in activities including human trafficking, illegal immigration, supporting terrorist organizations or what the rule described as the "chemical castration" of children, which included hormone therapy and puberty blockers.
U.S. District Judge Myong Joun in Massachusetts ruled the changes exceeded the department's authority and could violate First Amendment protections.
"The Department cannot create new criminal prohibitions through rulemaking," Joun wrote.
In a separate case, U.S. District Judge Amir Ali in Washington, D.C., also blocked the rule from taking effect.
The lawsuits were brought by more than 20 states, nonprofit groups and cities, which argued the changes could be used to punish organizations based on their missions or political views.
The Education Department said it is reviewing the rulings.
"The Department stands behind this commonsense policy to ensure that taxpayer dollars are never used to subsidize illegal activities," Under Secretary of Education Nicholas Kent said in a statement.
The loan forgiveness program has canceled debt for more than one million borrowers since it was created.
Diane Yentel, president and CEO of the National Council of Nonprofits, called the ruling "a win for the communities that depend on local nonprofits and for the workers who serve them."
Student Defense, another group that challenged the rule, said the decision protects borrowers from losing loan forgiveness because of where they work.
"Public servants should not have to worry that the federal government will punish them because of their employer's mission or perceived political views," said the group's president, Aaron Ament.