Two federal judges struck down a Trump administration rule change that would have removed borrowers from a student loan forgiveness program, finding the action violated administrative law requirements.
The judges, ruling in separate lawsuits filed this week, determined the administration's attempt to restrict eligibility for the loan forgiveness initiative was arbitrary and therefore unlawful. Both decisions cite violations of the Administrative Procedure Act, which requires federal agencies to follow proper procedures when implementing policy changes and to provide rational bases for their actions.
The administration's rule change sought to narrow the population of student loan borrowers eligible for forgiveness benefits. The judges found the government failed to provide adequate justification for removing previously eligible participants from the program.
The rulings have immediate practical consequences. Borrowers who faced removal under the proposed rule retain their eligibility for forgiveness relief. The decisions prevent the administration from implementing the restriction without undertaking the proper regulatory process, including notice-and-comment rulemaking and reasoned explanation for the policy shift.
Both cases challenge a core principle of administrative law: that federal agencies cannot change established policies arbitrarily. The judges emphasized that when an agency reverses or restricts an existing benefit program, it must explain why the prior policy was wrong and how the new approach serves valid government interests.
The student loan forgiveness landscape has been heavily litigated. The Biden administration's broader forgiveness plan faced multiple legal challenges, and the Trump administration has signaled intent to pursue different policies. However, these two rulings demonstrate that any changes must follow procedural requirements and cannot rest on arbitrary grounds.
The decisions likely face appeal, but they establish that the administration cannot unilaterally remove people from existing forgiveness programs without proper justification and procedure. Borrowers currently in the program gained judicial protection against arbitrary removal, at least pending further litigation.