Last PSLF Appeal Dropped: 22 States Claim Victory as Employer Rule Stays Struck Down
Quick answer
The final appeal is gone: the Trump administration has withdrawn its challenge in the multistate PSLF lawsuit, the last of three it had filed. State attorneys general say the move concedes the case and leaves a June 2026 ruling vacating the PSLF employer rule in place.
Key takeaways
- The appeal in Massachusetts v. U.S. Department of Education was dropped on October 22, 2026.
- A coalition of 22 attorneys general brought the case in November 2025.
- The District of Massachusetts vacated the rule in June 2026.
- California's Rob Bonta and Maryland's Anthony Brown hailed the result.
- All three government appeals over the rule are now withdrawn.
In this article
The last remaining court battle over the Trump administration's PSLF employer rule has ended. Federal lawyers withdrew the appeal in the multistate lawsuit one day after walking away from two related cases, state officials said.
The states' case
The coalition of attorneys general sued in November 2025, filing in the U.S. District Court for the District of Massachusetts. Their target was a rule allowing the administration to take PSLF eligibility away from workers at public and nonprofit employers it labeled as having a "substantial illegal purpose."
According to the California attorney general's office, the states argued the standard was ambiguous enough to reach legal activities the administration disfavored, including legal services for immigrants, gender-affirming care for minors, diversity, equity and inclusion initiatives, and civil protest and assembly. Because the rule also covered public employers, state agencies themselves could have been affected.
The ruling
In June 2026, the court vacated the rule. The judge concluded the rule broke federal law, exceeded what the Education Department may do, lacked a rational basis and infringed First Amendment rights. The government appealed to the First Circuit in August, then dropped that appeal on October 22, according to Oregon's Department of Justice.
What the attorneys general said
"The Trump Administration tried and failed to turn a bipartisan promise into a political weapon," California Attorney General Rob Bonta said, adding that "a government that depends on public servants must also stand by them."
Maryland Attorney General Anthony Brown said the coalition was "ensuring that no one is punished because their employer's mission does not match the President's politics."
Why it matters
Congress created PSLF in 2007 with bipartisan support to forgive remaining federal student loans for people who work in public service and make 10 years of qualifying payments. Millions of teachers, nurses, firefighters and nonprofit staff rely on it. With every appeal now withdrawn, the June ruling is the final word on this rule, and the program continues under its existing eligibility standards.
Frequently asked questions
Which states sued over the PSLF rule?
A coalition of 22 attorneys general, joined by the District of Columbia, sued in a case led by Massachusetts. California and Maryland were among the states that announced the dropped appeal.
What did the states argue?
The states said the rule's "substantial illegal purpose" standard was ambiguous and could be used against legal but politically disfavored work, such as legal services for immigrants, gender-affirming care for minors, diversity programs and civil protest.
Is the PSLF fight over?
On this rule, yes for now. All three appeals have been withdrawn, so the June 2026 rulings stand. No replacement rule has been announced.
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