Today, the U.S. Department of Education is expected to publish proposed regulations that aim to limit student loan forgiveness eligibility under the Public Service Loan Forgiveness (PSLF) program.
Get smart: PSLF, enacted under former President George W. Bush as part of the College Cost Reduction and Access Act of 2007, was designed to offer student loan forgiveness to borrowers who work public service, including teachers, firefighters, public defenders, and community health care workers. To be eligible, borrowers must make the minimum payments on their federal student debt while working at a qualifying public service or nonprofit employer for 120 months, or at least 10 years.
The proposed amendments come in response to a March 7 executive order, “Restoring Public Service Loan Forgiveness,” that takes aim at Biden-Harris administration “abuses” of the PSLF program which “misdirected tax dollars into activist organizations that… fail to serve the public interest… [and] harm national security.”
Key Changes
- ED will cut PSLF eligibility to nonprofit or government organizations determined to be engaging in activities with a “substantial illegal purpose” on or after July 1, 2026. ED will make these determinations based on a preponderance of evidence.
- These activities include providing certain health care services to transgender youth, supporting terrorist organizations, facilitating the violation of federal immigration laws, violating state laws, or engaging in a pattern of “illegal discrimination” as defined by federal law (presumably including DEI), among others.
What’s next: The Department will enter the proposed rules in the Federal Register, followed by a 30-day public comment period. Should ED publish a final rule by November 1, the proposed regulations would be set to take effect next summer.
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