Trump Administration Drops Appeal of Blocked Rule Targeting Employers That Help Immigrants or Trans Youth

The Trump administration dropped its appeals of two federal court rulings on October 22, 2026, ending its attempt to let Education Secretary Linda McMahon strip employers of Public Service Loan Forgiveness eligibility if she found they had a "substantial illegal purpose" -- a standard that could have covered employers serving undocumented immigrants or transgender youth, including schools, public hospitals, and legal aid groups. Each side will pay its own legal fees, and federal officials gave no public reason for abandoning the appeals.

In June, U.S. District Judge Myong Joun in Massachusetts vacated the rule in a suit brought by more than 20 states and nonprofit groups, finding it exceeded the Education Department's authority and threatened First Amendment protections; U.S. District Judge Amir Ali reached a similar conclusion the same day in a separate case brought by nonprofits. Because the administration dropped its appeals, those rulings stand, and PSLF -- which has forgiven loans for more than 1 million borrowers -- continues under its existing rules.