Trump’s New Rule On Public Service Loan Forgiveness: Who Loses Eligibility And What Borrowers Need To Know

The US Department of Education has announced a new rule that will change who qualifies for the Public Service Loan Forgiveness (PSLF) program. The rule will take effect on July 1, 2026, and aims to restrict eligibility for borrowers working in certain organizations. The PSLF program, created in 2007, forgives student loans for government and non-profit workers after 10 years of payments. Under the new Trump administration policy, groups that “engage in unlawful activities,” including “supporting terrorism or aiding illegal immigration,” will no longer qualify as eligible employers, as per CNBC report. Concerns Over Targeting Non-Profits The rule has sparked backlash from advocacy groups who say it unfairly targets organizations that help immigrants and transgender people. Mike Pierce, co-founder of Protect Borrowers, accused the Trump administration of using the program to punish nonprofits it disagrees with. “Donald Trump is weaponizing debt to police speech that does not toe the MAGA party line,” he said on X. Impact on Borrowers More than 40 million Americans have student loans totaling over $1.6 trillion, and about 9 million borrowers may qualify for PSLF. Under former President Biden, more than 1 million borrowers had their student debt forgiven after the administration made it easier to qualify. Those currently working for non-profits that may lose eligibility will still receive credit for their service until the rule takes effect. Experts predict the new regulations will face legal challenges once implemented. Get Latest News Live on Times Now along with Breaking News and Top Headlines from US News and around the World.