The Education Department filed notices of appeal this week in two legal challenges over its efforts to enact new rules to restrict student loan forgiveness. Those rules were struck down earlier this summer by two separate courts, providing borrowers with a significant victory. But the department’s appeals ensure that the legal challenges, and the uncertainty for borrowers with student loans on track for loan forgiveness, will continue.

The latest developments concern Public Service Loan Forgiveness, or PSLF, a program that allows borrowers to discharge their student loans after 10 years if they repay their loans under specific repayment plans while working in eligible full-time public service employment. The Trump administration had sought to limit PSLF by relief giving the Education Department the power to disqualify otherwise-eligible employers from participation. The department’s appeals this week of its recent court losses comes on the heels of its separate efforts this month to reverse PSLF credit for some borrowers, creating even more chaos and uncertainty for the program.

Here’s what’s going on with PSLF, and what the appeals means for borrowers pursuing student loan forgiveness.

Trump Administration Had Sought To Restrict Student Loan Forgiveness Under PSLF

Last year, Republican lawmakers in Congress passed legislation that upended many federal student loan repayment and forgiveness programs, leading to some of the most substantial changes to federal student loans in decades. But despite all the reforms, Congress left the PSLF program intact.

The Trump administration instead turned to an administrative process to revamp PSLF and restrict student loan forgiveness under the program. Following an executive order issued by President Trump last year, the Education Department drafted new rules that would give Secretary of Education Linda McMahon sweeping authority to cut off employers from participating in the PSLF program if they engaged in activities that have a “substantial illegal purpose.” That phrase was then defined broadly in the rules to include conduct that touched on immigration work, public protest, healthcare for transgender youth, and certain forms of alleged discrimination. Under the rules, the Secretary could unilaterally strip an employer of PSLF eligibility if she determined that an employer was engaged in the type of conduct outlined in the regulations, effectively cutting off its employees from student loan forgiveness with no recourse other than to find a new job with a different organization.

A vast coalition of labor unions, nonprofit organizations, and Democratic-led states and municipalities filed multiple legal challenges over the proposed new regulations. The rules were unlawful, they argued, as Congress had passed no law authorizing such restrictions, nor did it confer any authority on the Education Department to strip otherwise-qualifying public service employers of their PSLF eligibility. And, the challengers contended, the regulations would allow the government to weaponize a popular student loan forgiveness program to coerce and punish groups, organizations, and state and city governments that opposed Trump administration policies. The Education Department disagreed, arguing that not only were the new PSLF restrictions perfectly legal, they were necessary in order to ensure that student loans aren’t getting forgiven for people who work for organizations engaged in unlawful activities.

In June, just hours before the rules were set to take effect on July 1, two federal courts sided with the challengers, and struck down the rules as unlawful.

“The challenged rule is contrary to and exceeds the Secretary’s authority under the Higher Education Act because the act’s plain text says the PSLF program shall be made available to people with a full-time job at a section 501(c)(3) organization and does not allow the Secretary to exclude certain section 501(c)(3) organizations from the program based on her categorization of their activities,” reads the decision issued by the U.S. District Court for the District of Columbia in a case led by the Robert F. Kennedy Center for Justice and Human Rights. “The language does not suggest—let alone say—that the Secretary can pick and choose among section 501(c)(3) organizations.”

What The Education Department’s Appeals Of The Student Loan Forgiveness Rulings Mean For Borrowers

The dual court rulings striking down the proposed student loan forgiveness restrictions for PSLF were major victories for borrowers. But the Education Department had a 60-day window to appeal those decisions. And on Thursday, it did.

“All Defendants provide notice that they hereby appeal to the United States Court of Appeals for the First Circuit the Court’s June 30, 2026 Memorandum of Decision (ECF No. 127) and Order of Dismissal (ECF No. 128), which granted Plaintiffs’ February 13, 2026 Motion for Summary Judgment (ECF No. 48) and denied Defendants’ March 16, 2026 Cross-Motion to Dismiss, or in the Alternative for Summary Judgment (ECF Nos. 109, 110),” reads the notice of appeal in one of the challenges that had been decided by the U.S. District Court for the District of Massachusetts. The department filed a similar notice of appeal in the U.S. District Court for the District of Columbia; that appeal will be heard by the U.S. Court of Appeals for the District of Columbia.

For now, nothing changes for borrowers with student loans on track for PSLF. The Education Department’s proposed restrictions for the program remain blocked. No legal briefs have been filed at either appeals court, and both courts will set a briefing schedule that will likely play out over several months. The department has kept in place a banner message on its main PSLF website confirming for student loan borrowers and public service organizations that the “Department of Education can’t enforce certain changes to the PSLF Program previously scheduled to take effect July 1, 2026" due to recent court rulings.

But the appeals inject new uncertainty for borrowers hoping to get their student loans forgiven under PSLF. Appeals courts don’t always agree with lower court rulings, and an adverse decision could upend or complicate student loan forgiveness under the program. And any decision by the two appeals courts won’t necessarily be the final word, as the losing party will be able to appeal to the U.S. Supreme Court.

Student Loan Forgiveness Under PSLF Faces Other Uncertainties

The Education Department’s appeals of the PSLF rulings were filed as the program is facing other headwinds at the same time. Earlier this month, the department quietly began reversing PSLF credit for certain accounts, setting some borrowers back by months or years on their student loan forgiveness timeline. The department has claimed that these efforts are intended to correct data irregularities introduced into its systems by the Biden administration, and they seem to be focused on reversing PSLF credit for borrowers who were not in a qualifying repayment plan. But other borrowers whose student loans were in full compliance with PSLF rules also appear to be losing PSLF credit . The department has yet to acknowledge that some borrowers are being wrongfully swept up in its data correction efforts.

Nevertheless, despite the problems and uncertainties facing the program, borrowers are continuing to get their student loans forgiven under PSLF. This week, many borrowers posted on public forums like Reddit celebrating their PSLF “golden letters” they had just received from the Education Department, confirming that they had gotten student loan forgiveness and had fulfilled their public service obligations.