Millions of student-loan borrowers are on track to face changes to a key forgiveness program.
President Donald Trump’s administration finalized a rule that would limit eligibility for the Public Service Loan Forgiveness program, which is set to go into effect on July 1. Democratic lawmakers, led by Sens. Patty Murray and Tim Kaine, introduced a resolution in April to overturn the rule, but it was rejected by the Republican majority on May 20.
PSLF forgives student debt for government and nonprofit workers after 10 years of qualifying payments, and it was signed into law by former President George W. Bush in 2007.
Trump’s Department of Education, however, is seeking to change who is eligible for the program. Trump directed the Education Secretary, Linda McMahon, in an executive order, to redefine what “public service” means. In October 2025, the department finalized a rule that would “exclude employers that participate in illegal activities such that they have a substantial illegal purpose.”
The department listed activities, including terrorism and gender affirming care, that could disqualify an employer from participating in the program.
Democratic lawmakers and advocates have argued that the rule is politically motivated and would block public servants from accessing debt relief because their employers do not align with the administration’s beliefs. For example, an employer that supports gender transitions could be disqualified. The Senate’s rejection of the resolution to block the rule means borrowers might soon experience changes to the debt relief program.
“This policy hands Secretary McMahon the power to decide which nonprofits are politically acceptable and strip eligibility from the rest—based on nothing more than a vague, made-up standard that invites her to target any organization Trump doesn’t like,” Democratic Sen. Patty Murray said in a statement. “That’s not how this program is supposed to work, and every American should be alarmed by it.”
The Department of Education has maintained that the rule is intended to ensure that PSLF is available only to employers that follow the law.
“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,” Undersecretary of Education Nicholas Kent said in a statement.
Where Public Service Loan Forgiveness stands
PSLF eligibility has not yet changed, and borrowers can continue pursuing relief through the program based on existing qualifications.
For example, Aidvantage, a federal student-loan servicer, states in a notice at the top of its website that it will “provide updates when the regulations are implemented. For now, there are no impacts to borrowers, payment counts, or discharges.”
It’s unclear how soon the Department of Education will remove PSLF eligibility for employers after implementation. According to a fact sheet, if the department determines that an employer is engaged in illegal activity, the employer would be notified and given an opportunity to rebut the department’s findings.
Even after the Senate rejected the Democratic lawmakers’ resolution, the PSLF rule is still facing other hurdles. Advocacy groups Protect Borrowers and Democracy Forward filed a lawsuit in November 2025 on behalf of over a dozen cities, labor unions, and nonprofits over the rule. A hearing on the case is scheduled for June 3.
In the meantime, PSLF borrowers can await updates from their student-loan servicers and prepare for Trump’s student-loan repayment overhaul, which is also set to go into effect on July 1.
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