A federal judge has halted a new policy proposed by President Donald Trump’s administration that sought to limit eligibility for federal student loan forgiveness among public service employees. Judge Myong Joun of the US District Court in Boston issued the ruling on Tuesday, siding with several Democratic-led states, cities, and non-profit organisations. They had contended that the Department of Education’s proposed guideline would unjustly target groups advocating for immigration rights, transgender healthcare, and similar causes that contradict the administration’s agenda.

The Public Service Loan Forgiveness Program (PSLF) enables borrowers working in government or non-profit sectors to have their federal student loans forgiven after ten years of service. Since its inception in 2007, the programme has provided debt relief to over 1 million borrowers. Critics in the Trump administration claimed that the programme was being exploited by activist groups, which, according to them, posed a threat to national security and American values.

Judge Joun, appointed by President Joe Biden, elucidated that Congress intended the programme to incentivise public service careers, particularly for those burdened with significant educational expenses. The judge observed that the Education Department lacked the legal authority to redefine “public service” jobs in a manner that would disqualify various employers from the programme.

Discrimination Claims and First Amendment Violations

In his ruling, Judge Joun asserted that the proposed rule would unconstitutionally discriminate against certain viewpoints, thus violating the First Amendment. He pointed out that the new policy targeted non-profits engaged in advocacy that counteracts the Trump administration’s objectives. The judge highlighted that the implementation of this rule has already led to a chilling effect on constitutionally protected speech.

As the ruling took effect before the proposed changes were to be enforced on Wednesday, the Department of Education now finds itself in a position to reassess its approach. Under Secretary of Education Nicholas Kent stated that the department is currently evaluating the next steps regarding its policy. He expressed that the PSLF program is meant to back Americans serving the public interest rather than financing organisations involved in activities deemed harmful or illegal.

New York Attorney General Letitia James, a Democrat who collaborated with authorities from 22 states and the District of Columbia to challenge the rule, hailed the ruling as a victory against partisan misuse of the programme. She remarked that public servants should not face a political loyalty test to qualify for the loan forgiveness initially promised to them.

Revised Regulations Under Scrutiny

In March 2025, Trump issued an executive order claiming that the PSLF programme had misallocated tax dollars to activist organisations that do not serve the public interest and allegedly undermine national security. This order directed the Department of Education to revise existing regulations governing the programme to exclude entities engaged in activities defined as having a “substantial illegal purpose.”

The Education Department defined this term broadly, encompassing actions such as aiding illegal immigration, supporting terrorism, and engaging in discrimination. This sweeping definition raised concerns among legal experts and advocates, who argued that it appeared primarily aimed at discrediting certain advocacy groups. Therefore, the plaintiffs filed a lawsuit in November, asserting that the rule was explicitly crafted to target causes unfavourably viewed by the administration.

Judge Joun reaffirmed that the proposed rule would revoke PSLF eligibility from borrowers involved in legitimate activities, such as assisting immigrants, promoting diversity, equity, and inclusion, and facilitating gender-affirming healthcare. The ongoing legal discourse surrounding these policies continues to unfold within the broader context of educational financing and public service commitments in the United States.

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