Attorney General Ellison wins Public Service Loan Forgiveness lawsuit as Trump Administration drops appeal

AG Ellison sued in November 2025 to block new federal rule to end loan forgiveness for public servants — including military — for political beliefs and actions Trump Administration disfavors

Court vacated rule in June 2026, calling it illegal and unconstitutional; Trump dropping appeal means rule is dead, AG Ellison wins lawsuit

PSLC forgives student loans for borrowers who work in public service, including armed forces, after 10 years of payments

October 23, 2026 (SAINT PAUL) — Minnesota Attorney General Keith Ellison announced today that the Trump Administration has dropped its appeal of a court decision that vacated a U.S. Department of Education rule that would have allowed the Administration to strip Public Service Loan Forgiveness (PSLF) eligibility from employees of government and nonprofit organizations whose political beliefs or actions it disfavored politically. PSLF is the federal program that forgives the remaining federal student loans of borrowers who work in public service and make 10 years of qualifying payments.

In November 2025, Attorney General Ellison joined a coalition of 22 attorneys general in suing the Trump Administration over the rule. In June 2026, they secured a decision vacating the rule. By dropping its appeal of the federal district court’s June decision, the Trump Administration concedes the case, leaving the lower court’s ruling in place and resolving the matter in favor of Minnesota and the coalition states.

“Congress’s intent has always been clear: public and nonprofit workers — including Minnesota’s firefighters, military servicemembers, nurses, police officers, childcare workers, and city employees — earn student-loan relief after they serve for ten years,” said Attorney General Ellison. “That clear intent, however, didn’t stop President Trump from attempting to turn that law against Minnesotans who just want to serve others and weaponizing it to go after political opponents. That attempt was immoral, illegal, and unconstitutional and I’m very pleased we’ve protected this valuable program. I will remain vigilant about any future attempts to politicize or weaponize it.”

In 2007, Congress created the PSLF program in 2007 with bipartisan support to encourage college graduates to work in the public sector, where salaries are often lower than jobs in the private sector. PSLF helps nonprofits, the armed forces, and federal, state, and local governments recruit and retain skilled workers who might otherwise be forced to turn to private sector employment to afford to pay their student loans.

The Administration’s rule would have used an ambiguous standard to target legal politically disfavored conduct, including providing legal services to immigrants, providing gender-affirming care to minors, participating in diversity, equity, and inclusion initiatives, and engaging in constitutionally protected civil protest and assembly. In the rule, the Administration called supporting or engaging in those disfavored activities a “substantial illegal purpose.” In its June 2026 order vacating the ruling, the court held that the U.S. Department of Education’s regulations were contrary to law, arbitrary and capricious, exceeded the agency’s statutory authority, and violated the First Amendment of the U.S. Constitution.