Court Halts Federal Rule Denying Loan Forgiveness to Public Servants

Maryland Attorney General Anthony G. Brown announced that a federal judge has permanently blocked a rule from the U.S. Department of Education that would have restricted eligibility for the Public Service Loan Forgiveness (PSLF) program. The ruling prevents the federal government from denying loan forgiveness to essential public servants, such as teachers and nurses, based on the ideological stance of their employers.

The lawsuit, which Attorney General Brown joined in November 2025, challenged a new federal regulation that sought to allow the administration to deem state governments, hospitals, schools, and nonprofit organizations ineligible for PSLF. This would have granted the administration the power to exclude entities based on their support for policies like immigrants’ rights, gender-affirming healthcare, or diversity initiatives, effectively weaponizing the program. The PSLF program, established by Congress in 2007, is designed to encourage individuals to pursue careers in public service by forgiving federal student loan debt after ten years of qualifying employment and consistent payments. This program has been instrumental in enabling over one million public servants to dedicate their careers to essential roles and has been a vital tool for states like Maryland to attract and retain qualified professionals in critical sectors such as education, healthcare, and law enforcement.

The coalition of attorneys general argued in their legal challenge that the statute establishing PSLF guarantees loan forgiveness for all individuals working full-time in qualifying public service roles. They contended that the statute does not grant the Department of Education the authority to create exceptions based on political or ideological viewpoints. On July 1, 2026, the U.S. District Court for the District of Massachusetts sided with the coalition, granting their motion for summary judgment and declaring the challenged rule unlawful. This decision permanently prohibits the regulation from taking effect. The lawsuit saw participation from the attorneys general of Arizona, California, Connecticut, Colorado, Delaware, the District of Columbia, Hawaiʻi, Illinois, Maine, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, Rhode Island, Vermont, Washington, and Wisconsin, alongside Maryland.

For public servants across the nation, this ruling ensures continued access to a crucial benefit designed to support those dedicating their careers to public service. The Public Service Loan Forgiveness program allows individuals to have their remaining federal student loan debt forgiven after making ten years of qualifying monthly payments while working full-time for a government or qualifying nonprofit organization. This outcome is particularly important for states that rely on PSLF to attract and retain talent in vital public service sectors.

Article by Mel Anara, based upon information from the Maryland Attorney General’s Office.

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