Is public service loan forgiveness going away? What the PSLF appeal dismissals mean

What the PSLF appeal dismissals mean for public service loan forgiveness

On October 22, the parties in Commonwealth of Massachusetts v. U.S. Department of Education, No. 26-1973, filed a joint stipulation asking to dismiss the Education Department's appeal of the Massachusetts judgment, with each side to bear its own fees and costs. The stipulation identifies the states as plaintiffs-appellees and the Department as defendants-appellants. The filing is dated October 22, not October 26.

The Massachusetts judgment covered both the states' and nonprofit plaintiffs' challenges. A separate First Circuit stipulation shows that the Education Department and nonprofit plaintiffs filed to dismiss No. 26-1972 on October 21. The D.C. Circuit docket report identifies No. 26-5308 as the Education Department's appeal from the separate D.C. judgment, records a joint stipulation on October 21 and a clerk's order granting dismissal on October 26. The First Circuit documents are stipulations under Federal Rule of Appellate Procedure 42(b)(1), not appellate opinions on the merits.

That procedural step does not decide whether a particular job, loan, repayment month or PSLF application qualifies. If a disputed employer status or payment count is holding up a major decision, an education lawyer can help identify the records and rules that apply to that situation.

The PSLF employer rule courts set aside

The Education Department published its final employer rule on October 31, 2025. It would have allowed the Secretary to treat an employer as not qualifying for PSLF if the Department found the employer’s activities had a “substantial illegal purpose.” The final rule said that a borrower’s payments after such a finding would not count while the borrower worked for that employer.

The phrase was not a new condition Congress added to PSLF. It was an agency rule layered onto a program Congress created for borrowers who make the required payments while working in specified public-service jobs. That is why the court fight centered on agency authority, not on whether public servants’ loans are automatically forgiven.

Why the courts rejected the rule

In Massachusetts, Judge Myong J. Joun held that Congress had prescribed the requirements for PSLF-eligible public-service jobs and had not given the Secretary authority to disqualify otherwise eligible employers using the new test. His June 30 decision also held the rule arbitrary and capricious and in violation of the First Amendment, then vacated it.

A different federal district court reached the same immediate remedy in Washington. Judge Amir H. Ali wrote that the statute requires credit for a borrower who works full time at any qualifying 501(c)(3) organization, rather than letting the Secretary “pick and choose” among them; the D.C. opinion vacated the rule. For a broader look at when judges can stop federal action, see our 2026 federal-courts guide.

What PSLF still requires

PSLF itself has not been erased or expanded by the October 22 stipulation. Federal Student Aid says PSLF may forgive the remaining balance of Direct Loans after 120 qualifying monthly payments while the borrower works full time for an eligible employer. Your own PSLF record still turns on the current official PSLF guidance.

Put plainly, the employer rule is gone, but the program is not automatic. A reader weighing a workplace move should not treat this court news as a substitute for their own PSLF account, employer certification or loan history. Loan and repayment disputes can also overlap with banking and finance law.

How the PSLF employer-rule cases got here

The timing matters because the district courts set the rule aside in June. The October 21 nonprofit stipulation and October 22 states' stipulation are the latest First Circuit filings cited for Nos. 26-1972 and 26-1973; each asks the court to dismiss the Education Department's appeal under Federal Rule of Appellate Procedure 42(b)(1). The public D.C. docket copy records the Education Department's August 27 notice of appeal in No. 26-5308, the October 21 joint stipulation and the October 26 clerk's order granting dismissal.

1. October 31, 2025

   The Education Department publishes the final PSLF employer rule.

2. June 30, 2026

   Federal district courts in Massachusetts and D.C. vacate the rule, one day before its effective date.

3. October 21, 2026

   The Education Department and nonprofit plaintiffs file a joint First Circuit stipulation to dismiss No. 26-1972. The D.C. Circuit docket also records a joint stipulation in No. 26-5308.

4. October 22, 2026

   The Education Department and the states file a joint stipulation to dismiss the Department's First Circuit appeal in No. 26-1973.

5. October 26, 2026

   The D.C. Circuit docket records a clerk's order granting the parties' stipulation to dismiss No. 26-5308.

What to verify next if you are pursuing PSLF

The district-court rulings vacated one final employer exclusion rule. They do not replace the records that establish a borrower’s own path to forgiveness. If an agency decision is at issue, an appeals lawyer can explain the procedure and deadline that apply; for broader case-specific options, see how to find legal help.

1. Whether the loans you want forgiven are eligible Direct Loans and are not in default.
2. Whether the employment and employer fit the current official PSLF guidance for the months at issue.
3. Whether your account records show 120 qualifying monthly payments, rather than simply 120 calendar months worked.
4. Whether an employer certification, count adjustment or application problem needs a prompt, case-specific response.