Trump Administration Abandons PSLF Final Rule

By Hugh T. Ferguson, NASFAA Managing Editor

The Trump administration has moved to dismiss two of its three appeals of rulings that struck down its Public Service Loan Forgiveness (PSLF) Final Rule, signaling an end to its effort to implement the regulation.

The PSLF Final Rule would have allowed the Department of Education (ED) to deny eligibility for the forgiveness program to public service workers whose employers were found to have a “substantial illegal purpose.” The rule was vacated just hours before its scheduled July 1, 2026, effective date, and the administration moved to appeal that ruling in August.

A new court filing on Wednesday, October 21, indicates that the administration has moved to dismiss two of its appeals; the third appeal remains pending, though it is assumed that it will be dropped as well. If it does, the original ruling vacating the rule will become final. The department is not legally required to formally rescind the rule, though the vacated language may continue to appear in the Code of Federal Regulations, though not enforceable, until ED acts.

The administration could try to amend its PSLF rule through new rulemaking, but the court’s findings that the rule was contrary to law and violated the First Amendment would significantly constrain any new version. If a revised version that mirrors the original rule is introduced, it would likely face legal challenges.

NASFAA will continue to monitor the remaining appeal and any further action from the department. Follow this case and other higher education litigation on NASFAA’s Financial Aid Litigation tracker.

Publication Date: 10/23/2026

David S | 10/23/2026 9:54:48 AM

I would celebrate this as justice prevailing, but instead I fear that they'll just do a de facto implementation of this unlawful rule by not processing the PSLF applications for eligible borrowers employed at entities they don't like.

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Trump Administration Abandons PSLF Final Rule

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