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Public Service Loan Forgiveness
The Public Service Loan Forgiveness (PSLF) program is a United States government program that was created under the College Cost Reduction and Access Act of 2007 signed into law by President George W. Bush to provide indebted professionals a way out of their federal student loan debt burden by working full-time in public service.
The program permits Direct Loan borrowers who make 120 qualifying monthly payments under a qualifying repayment plan, while working full-time for a qualifying employer, to have the remainder of their balance forgiven. The earliest time in which borrowers could receive forgiveness under the program was after October 1, 2017. The Department of Education reported that 2,215 borrowers had the remainder of their respective student loans forgiven under the program as of April 30, 2020 for a denial rate of 98.5%.[failed verification][unreliable source]
Government organizations or agencies (federal, state or local), 501(c)(3) organizations as defined by the IRS, and some other types of not-for-profit organizations providing designated public services qualify for PSLF. Examples of qualifying government employers include but are not limited to public schools, the U.S. military, and public health or welfare agencies. Organizations that qualify under section 501(c)(3), also known as charitable organizations, must only operate for exempt purposes such as charitable, religious, educational, or scientific purposes that do not incur individual benefits or private gain. Examples of 501(c)(3) organizations may include most private educational institutions, homeless shelters, food banks, and nonprofit hospitals.
The nature of the individual's job responsibilities is not a determining factor in whether the employment qualifies. Rather, only the employer's status as a qualifying employer determines whether the employment qualifies.
With limited exception, the individual must be directly employed by the qualifying employer. Therefore, government contractors will not qualify on the basis of their government contracts. Instead, they must independently be a qualifying employer. Another example is the national labs. Employees at national labs such as a Department of Energy or National Nuclear Security Administration Lab, do not qualify on the basis of managing a lab for the government; rather, the managing entity of the lab must be a qualifying employer.
On March 7, 2025, President Donald J. Trump signed and issued an executive order titled Restoring Public Service Loan Forgiveness (14235[ws]) that directs the Secretary of Education to revise the Public Service Loan Forgiveness Program regulations to exclude organizations engaging in activities deemed to have a “substantial illegal purpose” from PSLF eligibility. Actions such as aiding illegal immigration, terrorism, child trafficking, discrimination, and acts of civil disorder were cited in the order as disqualifying activities. In response, concerns regarding the ambiguous scope of the "substantial illegal purpose" have centered on the potential for inadvertently disqualifying individuals employed in widely recognized nonprofit or public service sectors.
The U.S. Department of Education convened negotiated rule-making sessions on July 2, 2025. The committee reached near-unanimous consensus on several provisions and ultimately produced 15 significant revisions to PSLF regulations, to be drafted in a Notice of Proposed Rulemaking (NPRM) and released later in 2025.
On October 30, 2025, the administration finalized the rules, expanding the power of the Education Department to exclude organizations from the program that engage in activities involving a "substantial illegal purpose", including puberty blockers for trans youth (referred to as "chemical castration") and illegal immigration.
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Public Service Loan Forgiveness
The Public Service Loan Forgiveness (PSLF) program is a United States government program that was created under the College Cost Reduction and Access Act of 2007 signed into law by President George W. Bush to provide indebted professionals a way out of their federal student loan debt burden by working full-time in public service.
The program permits Direct Loan borrowers who make 120 qualifying monthly payments under a qualifying repayment plan, while working full-time for a qualifying employer, to have the remainder of their balance forgiven. The earliest time in which borrowers could receive forgiveness under the program was after October 1, 2017. The Department of Education reported that 2,215 borrowers had the remainder of their respective student loans forgiven under the program as of April 30, 2020 for a denial rate of 98.5%.[failed verification][unreliable source]
Government organizations or agencies (federal, state or local), 501(c)(3) organizations as defined by the IRS, and some other types of not-for-profit organizations providing designated public services qualify for PSLF. Examples of qualifying government employers include but are not limited to public schools, the U.S. military, and public health or welfare agencies. Organizations that qualify under section 501(c)(3), also known as charitable organizations, must only operate for exempt purposes such as charitable, religious, educational, or scientific purposes that do not incur individual benefits or private gain. Examples of 501(c)(3) organizations may include most private educational institutions, homeless shelters, food banks, and nonprofit hospitals.
The nature of the individual's job responsibilities is not a determining factor in whether the employment qualifies. Rather, only the employer's status as a qualifying employer determines whether the employment qualifies.
With limited exception, the individual must be directly employed by the qualifying employer. Therefore, government contractors will not qualify on the basis of their government contracts. Instead, they must independently be a qualifying employer. Another example is the national labs. Employees at national labs such as a Department of Energy or National Nuclear Security Administration Lab, do not qualify on the basis of managing a lab for the government; rather, the managing entity of the lab must be a qualifying employer.
On March 7, 2025, President Donald J. Trump signed and issued an executive order titled Restoring Public Service Loan Forgiveness (14235[ws]) that directs the Secretary of Education to revise the Public Service Loan Forgiveness Program regulations to exclude organizations engaging in activities deemed to have a “substantial illegal purpose” from PSLF eligibility. Actions such as aiding illegal immigration, terrorism, child trafficking, discrimination, and acts of civil disorder were cited in the order as disqualifying activities. In response, concerns regarding the ambiguous scope of the "substantial illegal purpose" have centered on the potential for inadvertently disqualifying individuals employed in widely recognized nonprofit or public service sectors.
The U.S. Department of Education convened negotiated rule-making sessions on July 2, 2025. The committee reached near-unanimous consensus on several provisions and ultimately produced 15 significant revisions to PSLF regulations, to be drafted in a Notice of Proposed Rulemaking (NPRM) and released later in 2025.
On October 30, 2025, the administration finalized the rules, expanding the power of the Education Department to exclude organizations from the program that engage in activities involving a "substantial illegal purpose", including puberty blockers for trans youth (referred to as "chemical castration") and illegal immigration.