After recently restarting student debt cancellation, the Trump administration has announced a rule tweak that will limit eligibility for loan forgiveness for some public servants.
The Department of Education is altering the definition of a “qualifying employer” for the Public Service Loan Forgiveness program, the agency said Thursday.
That program, which launched under former President George W. Bush, cancels debt after a decade of qualifying payments for Americans who work for non-profits or the government.
The 2007 program was an attempt to encourage people to pursue careers in public service.
The Trump administration said the program will now “exclude organizations that engage in unlawful activities such that they have a substantial illegal purpose, including supporting terrorism and aiding and abetting illegal immigration.”
The changes will take effect July 1, 2026.
The Department of Education did not reveal exactly which non-profits will no longer qualify for the program.
It signaled organizations that work with illegal immigrants and transgender people may no longer qualify for the program.
Borrowers who have currently or previously worked for an organization that no longer makes the cut will still get credit for the program until the change takes hold in July. --->READ MORE HERE
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| Photo by ANDREW CABALLERO-REYNOLDS / AFP |
The Department of Education published new rules on Friday that would roll back student loan forgiveness for public servants. If they are ultimately enacted, broad cohorts of borrowers could be affected.
The new regulations target the Public Service Loan Forgiveness program. PSLF was created under President George W. Bush in 2007 to provide an incentive for graduates to take on lower-paying, high-need positions at nonprofit organizations and in government. The program offers student loan forgiveness to borrowers who commit to these careers for at least 10 years while making payments on their Direct federal student loans under authorized repayment plans.
But the Trump administration has argued that PSLF as too generous, leaving taxpayers on the hook. In March, President Donald Trump issued an executive order calling on the Department of Education to draft new regulations cutting off eligibility for student loan forgiveness under the program for certain organizations. The department’s publication of the new rules in the Federal Register on Friday is the culmination of these efforts.
Here’s what the new PSLF rules would do, and which borrowers would be most at risk of being denied student loan forgiveness.
Student Loan Forgiveness Rollback For PSLF
The Department of Education’s restrictions on student loan forgiveness under PSLF would target employers that engage in activities that have a “substantial illegal purpose.”
“The Department of Education (Department) is committed to ensuring that taxpayer dollars are not used to support organizations engaged in unlawful activities,” said the department in a summary accompanying the publication of the rules in the Federal Register. “To uphold this principle, the Secretary will exclude organizations engaged in specific enumerated activities such that they have a substantial illegal purpose from being considered qualifying employers under the Public Service Loan Forgiveness (PSLF) program.”
The regulations outline several categories of activities that would be considered to have a “substantial illegal purpose.” These include “aiding and abetting violations of Federal immigration laws,” “supporting terrorism,” providing certain forms of gender-affirming medical care to transgender youth, “engaging in a pattern of aiding and abetting illegal discrimination,” and “engaging in a pattern of violating State laws.” --->READ MORE HERE
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