Trump administration proposes limits to student loan forgiveness
The U.S. Department of Education has published proposed regulations aimed at narrowing eligibility for student loan forgiveness under the Public Service Loan Forgiveness program. While not yet in effect, the release initiates a public comment period and signals a major policy shift that could impact millions of federal student loan borrowers.
Established in 2007, the Public Service Loan Forgiveness program forgives the remaining balance of federal student loans for borrowers who work in qualifying public service jobs for 10 years while making eligible payments.
The proposed rules, initiated under an executive order from President Trump, would disqualify borrowers from the program if their employer is determined to have engaged in activities deemed to serve a “substantial illegal purpose.” This could include actions such as providing healthcare to transgender youth, violating immigration laws or engaging in discriminatory practices, based on the Department’s definitions.
If enacted, the rules would apply to employer conduct beginning July 1, 2026. Borrowers working for disqualified organizations after that date would no longer earn credit toward loan forgiveness, although they could continue pursuing the Public Service Loan Forgiveness program by switching to qualifying employment.
The formal public comment period begins Aug. 18 and the final rule is expected by November. If adopted, the new regulations would take effect on July 1, 2026.
Read more: Forbes
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