Trump Drops Two Student-Loan Appeals, Leaving Public-Service Debt Relief Rules Blocked

The Trump administration has given up two of the three appeals in its fight to limit Public Service Loan Forgiveness (PSLF). Its rule would have cut some public servants off from debt relief. Justice Department lawyers lodged the papers on Wednesday, 21 October. The limits remain blocked, and PSLF continues.

The scheme clears federal student debt for eligible public-sector and nonprofit staff after 120 qualifying monthly payments made while working full-time for eligible employers. Federal figures show it had wiped out $87.6 billion (£65.74 billion) for nearly 1.2 million borrowers by September 2025. But a third appeal, against 22 states, is still underway, so the fight continues.

What the Court Filings Say

Each filing is one sentence agreed by both sides. Justice Department lawyer Simon Jerome signed both with the other side's lawyers. One ends an appeal at the Washington appeals court. The Robert & Ethel Kennedy Human Rights Center and others brought that case. A second ends one at the First Circuit in Boston, in a case filed by nonprofits, unions and cities. Each side pays its own costs, and neither filing gives a reason; US officials offered none, the Associated Press reported.

Advocates praised the move. Democracy Forward, the legal group behind the Boston case, signed one filing on behalf of the groups, unions, and cities it represents. Student Defense acted for the Washington plaintiffs, alongside Public Citizen. Its chief counsel, Dan Zibel, called it 'a significant victory for millions of Americans who have dedicated their careers to public service'. All three suits were filed within days of the rule's November 2025 release.

Which Jobs Still Count

The rule came out on 31 October 2025, after an executive order Trump signed that March. Under it, Education Secretary Linda McMahon could have barred any employer she found had a 'substantial illegal purpose'. Examples were helping people break US immigration law or giving gender transition care to minors, and staff at a barred employer would have stopped earning PSLF credit after the department disqualified the employer. At the time, officials said the change would steer the benefit towards teachers, civil servants and first responders.

Judges in Massachusetts and Washington struck the rule down on 30 June, a day before its start, in rulings the government appealed. In the Boston court, Judge Myong Joun found it unlawful and arbitrary, violating free speech rights. Government agencies and nonprofits set up under section 501(c)(3) of the tax code still qualify. So do some other nonprofits that provide public services. Borrowers have nothing new to do.

The Appeal That Remains

The last appeal, led by 22 states and the District of Columbia, is still open in the Boston court. The government's brief there is due on 4 November. If the government drops that appeal too, the June ruling becomes final, and the rule stays void.

This fight differs from past battles over wiping out debt. In 2023, the Supreme Court struck down Joe Biden's plan to forgive loans for millions of borrowers. This case was narrower: the question was which employers count towards PSLF, not whether debts can be cancelled in bulk.