Trump administration to limit student loan forgiveness eligibility

The U.S. Department of Education released its final rule on Thursday, aiming to limit eligibility for a popular student loan forgiveness program for public servants.

 The rule, which will take effect July 1, 2026, will change the definition of an "eligible employer" under the Public Service Loan Forgiveness Program. Signed by George W. Bush in 2007, PSLF provides loan forgiveness access to nonprofits and borrowers who work for the government, a decade after it was created.

 According to a statement from the Department of Education, under the Trump administration's new policy, organizations "engaged in illegal activities" such as "supporting terrorism and promoting illegal immigration" will be excluded from the program.

More than 40 million Americans have student loans, and outstanding debt exceeds $1.6 trillion. According to 2022 estimates from Protect Borrowers, a nonprofit focused on student loans, more than 9 million borrowers could be eligible for PSLF.

 President Donald Trump has been a vocal critic of the Biden administration's student loan forgiveness efforts, including making it easier to qualify for PSLF. During President Joe Biden's tenure, more than 1 million people had their loans forgiven under the program.

 Rule Focuses on 'Illegal Activities'

While it will be up to the Secretary of the Department of Education to determine which nonprofits will lose eligibility, language in an agency fact sheet suggests that organizations working with immigrants and transgender people will face new scrutiny.

 Mike Pierce, co-founder and executive director of Protect Borrowers, wrote on X earlier this year that the Trump administration is using the PSLF program to punish organizations it dislikes.

 "Donald Trump is weaponizing the loans to monitor speech that doesn't align with the MAGA party line," Pierce wrote.

Borrowers who currently or previously worked for an organization that the Trump administration later excludes from the program will receive credit for that time—at least until the changes take effect in July.