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The U.S. Department of Education released its final rule on Thursday aimed at limiting eligibility for a popular student loan forgiveness program for public servants. The rule, which takes effect July 1, 2026, will change the definition of a "qualifying employer" under the Public Service Loan Forgiveness program. PSLF, signed into law in 2007 by George W. Bush, offers debt cancellation after a decade to borrowers who work for non-profits and the government. Under the new Trump administration policy, organizations "that engage in unlawful activities" such as "supporting terrorism and aiding and abetting illegal immigration" will be excluded from the program, according to an Education Department statement. More than 40 million Americans hold student loans, and the outstanding debt exceeds $1.6 trillion. Over 9 million borrowers may be eligible for PSLF, according to a 2022 estimate from Protect Borrowers, a nonprofit focused on student loans. While it will be up to the Education Department secretary to decide exactly which non-profits will lose eligibility, the agency's language in a fact sheet suggested those that work with immigrants and transgender people would be under new scrutiny. Mike Pierce, co-founder and executive director of Protect Borrowers, wrote on X earlier this year that the Trump administration was using the PSLF program to penalize organizations that it dislikes. "Donald Trump is weaponizing debt to police speech that does not toe the MAGA party line," Pierce wrote. Borrowers who are currently working for or previously worked for an organization that the Trump administration later excludes from the program will still get credit for that time — at least up until the changes go into effect in July. The regulations are expected to face legal challenges.
