Overview
- The Department of Justice dropped two appeals on Wednesday, leaving district-court injunctions intact that blocked a 2025 Education Department rule from taking effect.
- The vacated rule would have given Education Secretary Linda McMahon authority to disqualify employers and their employees from PSLF for alleged 'illegal' activities such as aiding undocumented immigrants or providing certain gender-related care.
- More than 20 states, cities, unions and nonprofit groups sued to stop the rule, and two federal judges ruled in June that the agency exceeded its statutory authority and raised First Amendment concerns.
- Federal officials provided no public explanation for dismissing the appeals and one related appeal in the First Circuit remains pending.
- Borrowers keep current PSLF protections for now but advocates warn the administration could try revised rulemaking or other administrative routes and borrowers still face separate operational issues, such as disputed payment crediting tied to prior coding errors.