Student-loan borrowers in public service risk losing access to a major loan forgiveness program in the new year

"In 2007, Congress approved the Public Service Loan Forgiveness program, which is designed to forgive student debt for government and nonprofit workers after 10 years of making qualifying payments. It meant that student-loan borrowers who dedicate at least a decade of their careers to public service work could count on their balances eventually being wiped out. President Donald Trump's administration is changing the popular program, in which about 7 million borrowers are enrolled."

"A fact sheet from the department said that the rule will change the definition of a qualifying employer "to exclude employers that participate in illegal activities such that they have a substantial illegal purpose." The final rule is set to go into effect in July 2026, and some student-loan servicers that collect payments from borrowers in PSLF have said that nothing is changing yet, and borrowers will receive updates as the regulations go into effect."

In 2007 Congress created Public Service Loan Forgiveness to erase student debt for government and nonprofit workers after ten years of qualifying payments. About 7 million borrowers are enrolled. The Department of Education finalized a rule narrowing PSLF eligibility in response to a March executive order that directed a redefinition of "public service." The rule redefines a qualifying employer to exclude entities that participate in illegal activities with a substantial illegal purpose. The final rule takes effect in July 2026. Some loan servicers state there are no immediate impacts and that borrowers will receive updates. Advocates have filed lawsuits challenging the changes.

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