The Public Service Loan Forgiveness (PSLF) program, a federal initiative that has offered life-changing debt relief to government and nonprofit workers, is facing significant changes under new rules rolled out by President Donald Trump’s administration. The proposed regulations, published in the Federal Register on Monday, aim to restrict eligibility for borrowers whose employers engage in what the government defines as unlawful or “anti-American” activities.
What the PSLF Program Does
Established in 2007, the PSLF program was designed to encourage careers in public service by forgiving the remaining balance on federal student loans after 10 years of qualifying payments. Since its creation, the program has helped discharge more than $1 billion in student debt for public servants including teachers, social workers, nurses, and military personnel.
For many borrowers, PSLF represents not just financial relief, but the chance to remain in lower-paying jobs that serve the public without being overwhelmed by student loan obligations. However, critics argue that the system has been plagued by complex rules and low approval rates. Now, Trump’s new rules threaten to make eligibility even narrower.
What the New Rules Say
The proposed regulation redefines how “public service” is determined for loan forgiveness eligibility. Under the new guidelines, borrowers will no longer earn PSLF credit for months worked at an employer deemed in violation of federal or state law, or engaged in practices that contradict established public policy.
According to the rule text, disqualifying conduct by employers could include:
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Violations of the Americans with Disabilities Act (ADA)
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Violations of federal immigration law
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Activities characterized as “chemical castration or mutilation,” specifically referencing the use of puberty blockers or hormones for transgender individuals
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Acts of terrorism or other unlawful activities
The Department of Education noted that the rules would include measures like advance notice and employer recertification options to minimize disruption, but acknowledged that some borrowers could lose credit toward forgiveness delaying or even preventing debt cancellation.
Pushback From Borrowers and Advocates
During negotiation sessions with stakeholders earlier in July, several members of the committee challenged the administration’s approach. Betsy Mayotte, president of The Institute of Student Loan Advisors, argued that Congress intended PSLF to be broad and inclusive, not limited by additional executive definitions.
“The intent of Congress was not to narrow the eligibility,” Mayotte said. “It was to make it as expansive as possible under the statute that they wrote.”
Student-loan borrowers themselves have also expressed growing anxiety. For many, PSLF is the only path to eventual debt relief. Jeff Hughes, a government employee nearing completion of his 10 years of qualifying payments, told local press: “I’m so close to the finish line. I really hope that the program continues as is because we need some more good people out there doing good work.”
The Administration’s Justification
The Trump administration argues that the changes are about accountability. Undersecretary of Education Nicholas Kent stated that the federal government has a “vital interest” in deterring unlawful conduct and ensuring that taxpayer-funded forgiveness is not extended to employees of organizations that break the law.
“The federal government has a vital interest in deterring unlawful conduct, and we’re moving quickly to ensure employers don’t benefit while breaking the law,” Kent said.
The Department of Education maintains that the education secretary has authority to interpret and refine PSLF rules, even if that narrows the scope of eligible employment.
What Comes Next
The proposed rule is now open to public comment through September 17, allowing individuals, advocacy groups, and employers to weigh in before final implementation. Borrowers, especially those working for nonprofits and advocacy organizations, are expected to flood the comment period with objections.
If enacted, the new rules could reshape the landscape of student loan forgiveness for public servants, leaving thousands uncertain about whether their years of payments will still count toward eventual debt relief.
Why This Matters
At a time when student loan debt in the U.S. exceeds $1.7 trillion, PSLF remains one of the most significant federal programs offering meaningful long-term relief. Narrowing eligibility could discourage young professionals from pursuing careers in education, healthcare, and community service precisely the fields the program was intended to support.
For borrowers like Hughes and countless others, the debate is not abstract. It’s the difference between a manageable financial future and decades of debt.
