Two U.S. District Court judges issued rulings on June 30, 2026, that halt a Trump administration regulation intended to tighten eligibility for the Public Service Loan Forgiveness (PSLF) program. The decisions keep the existing PSLF rules in place as of the date the new regulation was slated to take effect.

The rulings were issued on June 30, 2026, one day before the regulation was scheduled to become effective on July 1, 2026. The orders were entered in federal district courts in Washington, D.C., and in the Northern District of California [1][3]. The Department of Education, which administers PSLF, had announced the rule change earlier in the year.

U.S. District Judge Amir Ali and U.S. District Judge Myong Joun each issued separate injunctions that block enforcement of the rule [1][4]. The rule, finalized under the Trump administration, would have added new employer-based restrictions, limiting forgiveness for borrowers employed by certain public-service organizations [2][3]. Plaintiffs, representing current and prospective PSLF borrowers, argued that the regulation exceeded the Department’s statutory authority and violated due-process requirements [1][3]. The judges granted temporary restraining orders, concluding that the plaintiffs were likely to succeed on the merits and that irreparable harm would result if the rule took effect [1][4].

Judicial Decisions and Legal Context

Judge Amir Ali, presiding over the U.S. District Court for the District of Columbia, issued a preliminary injunction that bars the Department of Education from implementing the employer-restriction provisions of the rule [1][4]. In his order, Judge Ali noted that the regulation appeared to conflict with the statutory language of the Higher Education Act, which authorizes forgiveness based on a borrower’s employment in “government or not-for-profit” sectors without additional qualifiers [1][3].

Judge Myong Joun, sitting in the Northern District of California, issued a parallel ruling that likewise prevents the rule’s enforcement nationwide [4]. Judge Joun’s decision referenced the same statutory interpretation and highlighted procedural deficiencies in the rulemaking process, including insufficient public comment periods [4][3].

District Court for the District of Columbia, issued a preliminary injunction that bars the Department of Education from implementing the employer-restriction provisions of the rule [1][4].

Both rulings are temporary and remain in effect pending further litigation. The Department of Education has indicated that it will consider an appeal, but no filing deadline has been announced [3][4]. The injunctions maintain the status quo for the PSLF program, allowing borrowers to continue making qualifying payments under the existing eligibility framework [2][3].

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Details of the Blocked Regulation

The Trump-era regulation sought to amend the PSLF program by adding a “qualifying employer” definition that excluded certain public-service entities, such as state-run agencies that receive federal funding but are not classified as “government” under the new language [2][3]. The rule also introduced a “service-type” restriction, limiting forgiveness to borrowers employed in specific job categories deemed “critical” to public welfare [2][3].

The Department of Education justified the changes as a means to preserve program integrity and reduce perceived abuse, citing data that suggested a high proportion of borrowers were not meeting the ten-year payment requirement [1][3]. However, the regulatory text would have retroactively altered the eligibility criteria for borrowers who had already begun making qualifying payments, potentially disqualifying them from forgiveness based on their employer’s classification [2][4].

The rule was published in the Federal Register on May 15, 2026, and was set to become effective on July 1, 2026 [3][4]. Legal challenges were filed shortly after publication by advocacy groups representing student-loan borrowers, who argued that the rule violated the Administrative Procedure Act and the statutory purpose of PSLF [1][3].

Immediate Impact on Borrowers and Institutions

The injunctions mean that borrowers currently employed by government agencies, public-charter schools, non-profit hospitals, and other qualifying organizations will retain eligibility for loan forgiveness after ten years of qualifying payments [2][4]. No changes to repayment plans, qualifying payment counts, or employer verification processes are expected in the immediate term [1][3].

Legal challenges were filed shortly after publication by advocacy groups representing student-loan borrowers, who argued that the rule violated the Administrative Procedure Act and the statutory purpose of PSLF [1][3].

Higher-education institutions and loan servicers are instructed to continue processing PSLF applications under the pre-existing guidelines, without incorporating the newly proposed employer restrictions [3][4]. The Department of Education has issued a brief statement confirming that it will not enforce the blocked provisions while the litigation proceeds [1][4].

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Student-loan borrowers who had expressed concern about potential loss of eligibility can now continue their repayment strategies without adjusting for the proposed rule. Financial aid offices at universities and colleges are advised to update counseling materials to reflect that the PSLF program remains unchanged for the foreseeable future [2][3].

Key Facts

What: Federal judges block a Trump-era rule that would have added new employer restrictions to the Public Service Loan Forgiveness program.

When: Rulings issued June 30, 2026; the blocked rule was set to take effect July 1, 2026.

Impact: Borrowers working for government or non-profit employers retain eligibility for loan forgiveness after ten years of qualifying payments.

Impact: Borrowers working for government or non-profit employers retain eligibility for loan forgiveness after ten years of qualifying payments.

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Sources

• Judges halt Trump rules on public service student loan forgiveness | AP News
• Trump’s limits on student loan forgiveness program blocked | CNBC
• US judges block Trump’s limits on student loan forgiveness program | Reuters
• Judge blocks rule to strip public service workers of student loan forgiveness | The Guardian