The U.S. Department of Education today released its final rule to restore the taxpayer-funded Public Service Loan Forgiveness (PSLF) program to its intended purpose of benefitting Americans working in public service. The final rule amends the definition of “qualifying employer” to exclude organizations that engage in unlawful activities such that they have a substantial illegal purpose, including supporting terrorism and aiding and abetting illegal immigration.
In 2007, Congress established the PSLF program to encourage Americans to pursue public service by promising to forgive their remaining federal student loans after 10 years of both qualifying employment and monthly payments. However, the eligibility standards for what constitutes a qualifying public service employer have not been adequately monitored, allowing certain organizations to qualify despite engaging in illegal activities that harm their communities and the public good. The Trump Administration is rightsizing the program to ensure that PSLF benefits go only to borrowers employed by organizations that genuinely serve the public.
“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,” said Under Secretary of Education Nicholas Kent. “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.”
Background:
On March 7, 2025, President Trump signed Executive Order 14235, Restoring Public Service Loan Forgiveness, directing the Secretary of Education to propose revisions to the PSLF program and ensure the definition of “public service” excludes organizations that engage in activities that have a substantial illegal purpose. The Department held public hearings on April 29 and May 1, 2025, and engaged in the negotiated rulemaking process by convening a committee of higher education stakeholders and experts that convened June 30 through July 2 of this year.
Following negotiated rulemaking, the Department published a Notice of Proposed Rulemaking (NPRM) in the Federal Register on August 18, 2025, and invited public comment. The Department received nearly 14,000 comments, which are summarized and addressed within the final rule. Under the master calendar provisions of the Higher Education Act (20 U.S.C. 1089), the rule will go into effect on July 1, 2026.
The final rule is on public inspection in the Federal Register today and will be published on October 31, 2025. A fact sheet on the final rule can be found here.