Education Department Appeals Court Rulings That Struck Down PSLF Employer Rule

The Department of Education (via the Justice Department) filed notices of appeal on August 27, 2026 in both lawsuits that struck down the Department of Education’s PSLF employer eligibility rule. The government is taking National Council of Nonprofits v. McMahon to the First Circuit Court of Appeals and Robert F. Kennedy Center for Justice and Human Rights v. McMahon to the D.C. Circuit, filing just before the government’s 60-day appeal window closed.

Both appeals target rulings issued June 30, 2026 — one day before the PSLF Employer rule was scheduled to take effect. In Massachusetts, Judge Myong J. Joun’s 68-page decision (PDF File) vacated the rule as contrary to law, arbitrary and capricious, and a violation of the First Amendment. That decision also resolved the companion case brought by 22 states and the District of Columbia. The same day, the D.C. district court granted summary judgment to the RFK Center and co-plaintiff nonprofits in the parallel case.

Why It Matters

The rule would have let the Education Secretary disqualify employers found to engage in activities with a “substantial illegal purpose”. One of the big focuses of the lawsuits was that the language was based on the administration’s policy priorities about immigration, gender-affirming care, and DEI programs rather than settled criminal law. Teachers, nurses, and nonprofit workers faced losing credit toward forgiveness if their employer was cut from the program.

The Details

For now, nothing changes for borrowers. Both courts vacated the rule rather than merely pausing it, so the existing PSLF employer rules remain in effect while the appeals play out. But the filings confirm the administration intends to keep fighting for the rule rather than rewrite it.

The notices of appeal (PDF File) are two pages each and contain no legal arguments. The government’s case won’t be visible until opening briefs are filed in the respective courts.

The Massachusetts ruling covered a coalition of 22 states, D.C., five cities and counties, five nonprofit employers, and five employee associations. More than 100 amici backed the challengers while none supported the Department of Education.

The Department could ask the courts to pause (stay) the vacatur while the appeals proceed. No stay motion appeared on either docket as of August 27, but it’s important to watch for any changes. The Department previously tried adding a perjury attestation to PSLF employer forms while the litigation was pending, but that was stopped when the court vacated the rule.

How This Connects

The PSLF Employer rule was finalized October 31, 2025, and drew lawsuits within three days — first from cities and counties, then states and nonprofits. It was one piece of the larger student loan overhaul, alongside the RAP plan and Parent PLUS changes reshaping PSLF strategy.

What’s Next

The appeals now get docketed in the First and D.C. Circuits, with briefing likely stretching into late 2026 and decisions possible in 2027. And, of course, any future losses by the Department of Education could be appealed to the Supreme Court. Borrowers also need to watch for any potential stay of the current rulings, though unlikely.

In the meantime, borrowers should keep certifying employment as usual. The vacated rule has no effect unless an appeals court revives it. And even then, the Department would have to take a lot of action very quickly before any borrowers were at risk of losing future qualifying payments.

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