Sunita Somvanshi
If you work in government, public education, healthcare, or a nonprofit and you’re enrolled in Public Service Loan Forgiveness, the Trump administration has dropped the legal cases that could have taken the program away from millions of workers in some of those fields.
The Department of Justice voluntarily dismissed both of its appeals on October 21, 2026, ending its challenges to two federal court rulings from June that blocked proposed new restrictions on PSLF eligibility. One of the cases is captioned Robert F. Kennedy Center for Justice and Human Rights v. McMahon. The proposed rules had allowed the education secretary to disqualify employers found to have a “substantial illegal purpose” — a standard critics argued could strip eligibility from employees of organizations involved in gender-affirming healthcare for minors, immigration legal services, and diversity programs. With the appeals dropped, the district court rulings blocking those restrictions remain in force in those cases.
Borrowers employed by nonprofit hospitals, civil rights groups, immigrant legal clinics, and healthcare providers no longer face the proposed employer-based eligibility tests. Your qualifying monthly payments remain secure under the standard 120-payment rules, and the proposed employer eligibility restrictions are blocked by the court rulings that remain in force.
What the Dismissed Appeals Actually Mean
Approximately 2.3 million borrowers are currently pursuing PSLF, according to Benzinga’s reporting on the case. Plaintiffs in the litigation argued the proposed rules could have disqualified as many as 2.5 million borrowers.
The proposed restrictions, had they survived in court, would have required borrowers to certify not just their employer’s nonprofit tax status but the administration’s assessment of their organization’s activities. Healthcare workers at certain clinics and attorneys at immigration advocacy nonprofits faced the most direct exposure to disqualification under the “substantial illegal purpose” standard in the rule.
Dismissing the appeals leaves the district court rulings in force, which means the Department of Education cannot enforce those specific restrictions in these cases. An agency could attempt a new rulemaking in the future through the Administrative Procedure Act’s notice-and-comment process, but the current employer eligibility test is blocked.
For borrowers whose employer certification forms are pending or recently submitted, the dismissal changes nothing about your application process. The Employment Certification Form and MOHELA processing timelines remain in effect. Borrowers who had paused certification submissions out of concern about the proposed restrictions should resume normal enrollment procedures immediately.
The Student Borrower Protection Center described the administration’s decision to drop the appeals as a victory for public servants who had faced uncertainty about whether their qualifying payments would count toward eventual discharge. For workers in public health, education, and nonprofits, the dismissal means the program’s standard framework — forgiveness based on employer tax status and job function, not assessments of specific advocacy activities — remains in place.
One structural clarification worth noting: PSLF forgiveness is not automatic at 120 payments. Borrowers must submit a formal forgiveness application through MOHELA once they reach the threshold. Advocates recommend submitting early and following up regularly with your servicer on processing status.
For public sector workers newly evaluating whether PSLF makes sense for their federal student loan situation, the program’s eligibility rules are currently on the same footing they were before the proposed restrictions were announced. The Department of Justice did not provide a detailed explanation for the dismissals.
