The U.S. Department of Education has issued a final rule that changes the Public Service Loan Forgiveness (PSLF) program. The new rule redefines which employers qualify for the program, excluding organizations involved in illegal activities, such as supporting terrorism or aiding illegal immigration.
The PSLF program was created by Congress in 2007 to encourage Americans to work in public service jobs by offering forgiveness of federal student loans after ten years of qualifying employment and payments. According to the Department, previous standards did not adequately monitor employer eligibility, allowing some organizations engaged in unlawful activities to participate.
Under Secretary of Education Nicholas Kent stated, “Taxpayer funds should never directly or indirectly subsidize illegal activity. The Public Service Loan Forgiveness program was meant to support Americans who dedicate their careers to public service – not to subsidize organizations that violate the law, whether by harboring illegal immigrants or performing prohibited medical procedures that attempt to transition children away from their biological sex.” He added, “With this new rule, the Trump Administration is refocusing the PSLF program to ensure federal benefits go to our Nation’s teachers, first responders, and civil servants who tirelessly serve their communities.”
President Trump signed Executive Order 14235 on March 7, 2025, instructing the Secretary of Education to revise the PSLF program so that organizations with a substantial illegal purpose are excluded from being considered public service employers. The Department held public hearings in April and May 2025 and conducted negotiated rulemaking with higher education stakeholders at meetings held from June 30 through July 2.
A Notice of Proposed Rulemaking was published on August 18, 2025. Nearly 14,000 comments were received during the public comment period and have been addressed in the final rule. The regulation will take effect on July 1, 2026.
The final rule is available for public inspection in the Federal Register and will be officially published on October 31, 2025.
