Two Biden-appointed federal judges struck down the Trump administration's overhaul of the Public Service Loan Forgiveness program on Tuesday, blocking new eligibility restrictions just one day before they were set to take effect. The twin rulings, one in Massachusetts, one in Washington, D.C., found the Department of Education exceeded its authority and raised serious First Amendment concerns by trying to deny debt relief to workers at organizations the administration accused of having a "substantial illegal purpose."
The decisions mark the latest courtroom setbacks for the administration's efforts to reshape federal student loan policy. They also raise a harder question that neither ruling fully resolves: whether taxpayers should be forced to subsidize loan forgiveness for employees of groups that actively undermine federal law.
The Public Service Loan Forgiveness program, established by Congress in 2007, forgives federal student loans after ten years of qualifying public service employment. More than one million Americans have had their loans canceled under the program. President Trump issued an executive order last year directing the education secretary to narrow PSLF eligibility and exclude groups engaged in activities deemed illicit.
The Education Department responded with a final rule that defined prohibited activities to include aiding illegal immigration, supporting terrorism and trafficking, and facilitating what the rule called the "chemical and surgical castration or mutilation of children." Workers employed by organizations found to have a "substantial illegal purpose" under those categories would have been barred from receiving forgiveness.
U.S. District Judge Myong Joun, a Biden appointee in Massachusetts, issued the more detailed of the two opinions. He found the agency lacked the legal authority to impose the new restrictions, that the rule could violate the First Amendment, and that it threatened to force the administration's viewpoints on employers.
Judge Joun wrote plainly about the limits of agency rulemaking:
"The Department cannot create new criminal prohibitions through rulemaking."
He went further, finding that the rule had already produced a chilling effect on protected speech before it even took effect:
"Indeed, the record further demonstrates that the Final Rule has already chilled protected speech."
Judge Joun also found the changes were "arbitrary and capricious" under administrative law standards, a threshold that, if upheld on appeal, would make the rule difficult to revive without a substantially different legal rationale.
In a separate case in Washington, D.C., U.S. District Judge Amir Ali, also a Biden appointee, struck down the same rule. That suit was brought by four nonprofits that advocate for immigration rights, among other issues. The specific legal reasoning Judge Ali cited was not detailed in available reporting.
Under Secretary of Education Nicholas Kent defended the rule in terms that will resonate with most taxpayers. As the Washington Examiner reported, Kent framed the restrictions as common sense:
"The Public Service Loan Forgiveness Program is intended to support Americans who serve the public good, not to subsidize organizations that engage in terrorism, facilitate illegal immigration, or support the mutilation of children."
Kent said the agency is evaluating next steps for its "commonsense policy." Whether that means an appeal, revised rulemaking, or both remains unclear.
The administration's argument has a straightforward logic. The PSLF program was designed to reward public service, teachers, firefighters, nurses, social workers. The idea that taxpayers should also foot the bill for loan forgiveness at organizations actively working to undermine immigration law or facilitate other illegal conduct is, at minimum, a legitimate policy concern. The question is whether the Department of Education had the statutory authority to draw that line on its own, or whether Congress needs to act.
The rulings fit a pattern that has defined much of the Trump administration's second term. Biden-appointed judges have repeatedly blocked executive actions on immigration, education, and regulatory policy, often on procedural or constitutional grounds. The administration has faced similar judicial resistance on issues ranging from temporary protected status to deportation orders.
More than twenty states and a coalition of nonprofit groups brought the Massachusetts challenge. The challengers argued the rule would let the Department of Education target organizations supporting causes the administration disfavors, including transgender healthcare and immigration advocacy.
New York Attorney General Letitia James put the opposition's view bluntly. She called the rule "a blatant attempt to punish teachers, nurses, firefighters, social workers and other public servants for working in states or for organizations that this administration does not like."
That framing, however, obscures the actual scope of the rule. The restrictions were not aimed at rank-and-file public servants. They targeted loan forgiveness eligibility for employees at organizations the government determined had a "substantial illegal purpose." Whether that standard was too vague or too broad is a fair legal question. But casting the rule as an attack on teachers and firefighters overstates the case.
The administration has not lost every round in court. The Fifth Circuit recently handed the administration a significant win on mandatory detention policy, and appellate courts have sided with federal authority on other politically charged questions, including a Ninth Circuit ruling blocking a California law that targeted ICE agents.
But the student loan cases highlight a recurring weakness in the administration's approach: relying on executive action and agency rulemaking to achieve policy goals that may require legislation. Judge Joun's finding that the Department of Education "cannot create new criminal prohibitions through rulemaking" strikes at the heart of that strategy. If the administration wants to exclude certain categories of organizations from PSLF eligibility, it may need Congress to amend the statute, not simply rewrite the rules.
The blocked rule also attempted to exclude organizations supporting DEI programs, adding another politically charged dimension. Critics saw the provision as further evidence that the rule was motivated by ideological targeting rather than legitimate enforcement of existing law.
The administration's defenders counter that the PSLF program has expanded well beyond its original intent. When Congress created the program in 2007, the idea was to encourage talented graduates to enter modestly paid public service careers, teaching, law enforcement, military service, public health. The notion that loan forgiveness should extend to employees of advocacy groups that actively frustrate federal immigration enforcement was not, they argue, what Congress had in mind.
Kent's statement that the Education Department is "evaluating next steps" leaves the door open for appeal. Both rulings came from district courts, meaning the administration could seek review from the First Circuit (for the Massachusetts case) and the D.C. Circuit (for the Washington case). Given the constitutional questions involved, particularly the First Amendment issues Judge Joun identified, the cases could eventually reach the Supreme Court.
For now, the existing PSLF program remains intact. Workers at qualifying public service employers can continue to earn credit toward loan forgiveness under the original rules. The new restrictions are dead on arrival, at least until the legal process plays out or Congress acts.
The pattern of federal judges ordering the administration to reverse course on policy after policy raises its own set of concerns about the scope of judicial power. But in this instance, the judges may have a point about the mechanism. The policy goal, ensuring taxpayer-funded loan forgiveness goes to genuine public servants, not to employees of organizations working against the law, is defensible. The method of achieving it through agency rulemaking, without clear statutory authority, is where the administration stumbled.
If the administration believes taxpayers shouldn't subsidize loan forgiveness for workers at organizations that facilitate illegal immigration or other unlawful conduct, the answer is legislation, not rulemaking that two district courts found exceeded the agency's authority before the ink was dry.
The principle is sound. The execution needs work. And until Congress writes the law, the courts will keep writing the outcomes.
