Trump Administration Proposes Limits to Student Loan Forgiveness Program

The Trump administration announced Monday it is moving to restrict eligibility for the Public Service Loan Forgiveness (PSLF) program, a popular initiative that allows government and nonprofit workers to have their federal student loans canceled after 10 years of qualifying payments. The U.S. Department of Education said the proposed changes could “delay or prevent forgiveness for a subset of borrowers,” raising concerns among advocates and borrowers already facing long backlogs.

Under the proposal, employees of organizations deemed to be “undermining national security and American values through illegal means” would no longer qualify for forgiveness. The department issued a notice of proposed rulemaking, allowing public comments on the changes at Regulations.gov until Sept. 17.

University student | Source: Pexels

Created in 2007 under President George W. Bush, the PSLF program was designed to encourage careers in public service. Critics of the Trump administration’s proposal argue that the vague language could be used to target nonprofit organizations that the government disapproves of, potentially including those supporting undocumented immigrants or transgender individuals.

“Public Service Loan Forgiveness was enacted in a bipartisan way to help incentivize hardworking people to go into public service,” said Randi Weingarten, president of the American Federation of Teachers. “The Trump administration is trying, through executive authority, to limit who can access this benefit based on a litmus test of who they like and who they don’t like.”

University students | Source: Pexels

Education experts note that the changes cannot be applied retroactively. Betsy Mayotte, president of The Institute of Student Loan Advisors, said that work already performed for a qualifying employer would still count toward forgiveness. Borrowers whose organizations are later deemed ineligible would be able to switch to a qualifying job.

The proposal comes as more than 72,000 borrowers await decisions on existing PSLF applications.