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Court blocks Trump administration’s student loan forgiveness overhaul

Court blocks Trump administration’s student loan forgiveness overhaul By Heather Miller Published July 1, 2026 4:25 PM EDT A Trump administration overhaul of the public service student loan forgiveness program has been struck down by two federal judges who ruled that the program could become a tool for political retribution. The ruling came in response…

By Martin Johns2 min read

Court blocks Trump administration’s student loan forgiveness overhaul

A Trump administration overhaul of the public service student loan forgiveness program has been struck down by two federal judges who ruled that the program could become a tool for political retribution.

The ruling came in response to a pair of lawsuits filed by more than 20 states along with a coalition of nonprofit groups and cities.

Congress created Public Service Loan Forgiveness in 2007 to encourage college graduates to work in government and nonprofit jobs. It promised to forgive their federal student loans after they worked in public service jobs for 10 years.

RELATED: Student loan overhaul takes effect: What borrowers and parents need to know about new limits, repayment plans

It gave the education secretary power to exclude groups from the program if they engage in the trafficking or “chemical castration” of children, illegal immigration or supporting terrorist organizations. Its definition of “chemical castration” included using hormone therapy or drugs that delay puberty.

What did the ruling say? 

U.S. District Judge Myong Joun agreed, saying the changes overstepped the agency’s power and threatened to violate First Amendment protections for free speech. In Washington, D.C., District Judge Amir Ali issued a similar ruling in a case brought by nonprofit organizations. The rulings came a day before the new rules were set to take effect.

Joun said the new rules threatened to impose the administration’s policy views on employers. The judge also faulted the department for failing to connect its definitions of illegal activity to criminal statutes.

“The Department cannot create new criminal prohibitions through rulemaking,” he wrote.

“The Department offers no explanation for why a Final Rule with such sweeping consequences is necessary to address the possibility that, at most, ten employers each year may be engaging in illegal activity,” Joun wrote.

Under Secretary of Education Nicholas Kent said the department was evaluating next steps.

The Source: This report includes information from The Associated Press.

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Original source: https://www.livenowfox.com/money

Martin Johns

I am working as the content publisher and moderator for the website <a>Foxnews.com Breaking News</a>. You can read and provide your views about the news.

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