Court throws wrench into Trump effort to rein in student loan bailout program

The Trump administration’s attempt to clean up student loan programs took a hit on Tuesday.

Two Biden-appointed federal judges blocked the Trump administration from enforcing new restrictions on a student loan forgiveness program. The proposed rules would have prevented public service workers from receiving debt relief if their employers were deemed to have a “substantial illegal purpose,” reported The Hill.

More than 20 states and numerous nonprofit groups challenged the Trump administration rule in a pair of lawsuits, arguing the Department of Education could target organizations that support causes like transgender healthcare and other causes considered unfavorable by the current administration.

The Trump administration sought to add new rules to the Public Service Loan Forgiveness (PSLF) program as part of its overhaul to clean up government programs and reduce waste and corruption.

In Massachusetts, U.S. District Judge Myong Joun didn’t see it that way and struck down the changes, citing possible First Amendment violations and the agency’s lack of authority.

“The Department cannot create new criminal prohibitions through rulemaking,” Joun wrote in his opinion, adding: “Indeed, the record further demonstrates ‌that the ⁠Final Rule has already chilled protected speech.”

In a related ruling, U.S. District Judge Amir Ali in Washington, D.C. struck down the Trump administration’s proposed rule and sided with four “immigration rights” nonprofit organizations.

Secretary of Education Nicholas Kent signaled that the Trump administration isn’t done fighting for “commonsense policy.”

“The Public Service Loan Forgiveness Program is intended to support Americans who serve the public good, not to subsidize organizations that engage in terrorism, facilitate illegal immigration, or support the mutilation of children,” Kent said in a statement.

Last year, Trump directed the Department of Education to narrow the program’s eligibility, in part, by restricting groups tied to illicit or illegal activities.

The Education Department deemed those activities to include “aiding illegal immigration, supporting terrorism and trafficking, and facilitating the ‘chemical and surgical castration or mutilation of children,’” The Hill reported.

For now, the existing PSLF program remains the same, as the Trump administration seeks to find another way to reform federal student loan policy.

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