Judges strike down Trump rule on public service loan relief

Federal judges struck down a Trump administration rule that would have narrowed Public Service Loan Forgiveness, with U.S. District Judge Myong Joun vacating the regulation one day before it was set to take effect on July 1, 2026. The myong joun student loan ruling blocks eligibility cuts tied to employers deemed to have a substantial illegal purpose.

On June 30, 2026, two federal courts independently halted the same Public Service Loan Forgiveness overhaul. The decisions preserve a program Congress created in 2007 to forgive federal student debt for government and nonprofit workers after 10 years of qualifying payments.

Key Takeaways

• Judge Myong J. Joun in Massachusetts and Judge Amir H. Ali in Washington, D.C., both struck down the PSLF eligibility rule on June 30, 2026.
• The blocked rule would have disqualified employers with a substantial illegal purpose, including groups tied to immigration aid, diversity initiatives, or gender-affirming care.
• Joun ruled the Education Department exceeded its authority and violated the First Amendment.
• After a separate court loss over graduate loan caps, the department expanded its list of professional degrees from 11 to 29 programs.
• New federal borrowing limits still take effect July 1, 2026, but more fields, including nursing, qualify for higher caps during litigation.

What Did Judge Myong Joun Rule?

U.S. District Judge Myong J. Joun vacated the Education Department’s final PSLF rule after lawsuits from more than 22 states, Washington, D.C., cities, counties, and nonprofit groups. The rule fulfilled a 2025 executive order to exclude workers at organizations the administration said engaged in illegal activities.

Joun found the Trump administration exceeded congressional authority. Congress defined eligible public service jobs in 2007, and the judge wrote the statute does not give the secretary power to disqualify employers. He also called the rule arbitrary and capricious and said it violated First Amendment protections.

The judge noted the department estimated fewer than 10 employers per year might be barred, yet the regulation carried sweeping consequences. Joun wrote that the rule threatened to chill lawful speech by revoking eligibility for borrowers who assist immigrants or facilitate gender-affirming care.

How Did the Education Department Respond After Its Court Losses?

After U.S. District Judge Beryl A. Howell blocked the agency’s narrow definition of professional degree for new graduate borrowing limits, officials published an expanded interim list on Monday, June 30.

Previously, only 11 degree programs qualified for professional-level caps under the department’s rule. The updated list temporarily treats 29 programs as professional, adding nursing degrees, physical therapy, speech-language pathology, physician associates, and anesthesiologist assistants.

Professional students may borrow up to $50,000 annually and $200,000 in aggregate starting July 1, 2026, under Trump’s One Big Beautiful Bill Act. Other graduate students face caps of $20,500 per year and $100,000 total. The department said it will continue defending its original definition in court.

Who Is Affected by These Student Loan Changes?

Public servants ranging from teachers to public defenders remain eligible for PSLF under the court orders. Workers at nonprofits the administration targeted, including immigration and civil rights groups, avoid immediate disqualification from the forgiveness track.

Graduate students face a shifting landscape as loan limits replace the discontinued Grad PLUS program. Nursing students gain access to higher federal borrowing during the court stay, while some theology programs move to lower graduate caps. Master of divinity degrees remain professional.

Women account for more than 70% of graduates in programs excluded from the higher caps under the original list, CNBC reported. See our Future Tech & AI Wonders coverage for more on how federal rules reshape borrower outcomes.

What Happens Next for Borrowers?

The PSLF rulings take effect immediately, blocking the July 1 implementation. Borrowers making qualifying payments toward the 120-payment threshold can continue pursuing forgiveness without the new employer disqualifications.

Graduate borrowing caps remain in force after Howell’s stay. Institutions may limit loan amounts for newly professional programs if classifications change again, the department warned. Follow The New York Times coverage and school financial aid offices as litigation unfolds.