Table of Contents
As part of the latest Public Service Loan Forgiveness (PSLF) program news, the Education Department’s proposed PSLF changes are now published on the Federal Register and open for public comment until mid-September. The amended regulations restrict certain employers from inclusion under the program, thereby limiting PSLF access to borrowers who are employed by excluded organizations.
This is one of many anticipated overhauls to the federal student loan system prompted by the Trump administration. Here’s an overview of the Public Service Loan Forgiveness changes and how they might affect you.
Key Points
• Public Service Loan Forgiveness (PSLF) is a federal program that forgives the remaining balance on your Direct Loans after you have made 120 qualifying payments while working full-time for a qualifying public service employer.
• On March 7, 2025, President Donald Trump signed an executive order that excludes certain organizations from qualifying as employers under the Public Service Loan Forgiveness program.
• Borrowers who made student loan payments while employed by an organization excluded under the new PSLF rules may no longer qualify for loan forgiveness, potentially delaying their eligibility.
• New borrowers, specifically those who take out loans on or after July 1, 2026, will have their PSLF-qualifying repayment plans limited to the revamped Standard Repayment Plan or the RAP, which offers forgiveness after 30 years.
• If you’re relying on PSLF for your federal student loans, keep accurate records of your student loan payments and employment records, and stay in communication with your loan servicer about changes regarding PSLF.
What Is Public Service Loan Forgiveness (PSLF)?
The Public Service Loan Forgiveness program was created under the College Cost Reduction and Access Act of 2007 during the Bush administration. It was designed to incentivize federal student loan borrowers to pursue public-sector careers, which have historically offered lower wages for college graduates compared to the private sector. In exchange, borrowers would receive partial, tax-free loan forgiveness on their remaining eligible federal student loan balances after meeting PSLF requirements.
As of October 2024, over one million federal student loan borrowers have received loan forgiveness relief through the Public Service Loan Forgiveness program.
To receive PSLF, borrowers must make 120 qualifying full payments toward their eligible federal student loans. These payments must have been made while:
• Enrolled under a qualifying repayment plan, such as an income-driven repayment (IDR) plan
• Employed by a qualifying U.S. government or nonprofit organization, and
• Working full-time for a qualifying employer.
Only after successfully satisfying all of the program requirements can borrowers submit a request for PSLF either through the PSLF Help Tool or by mailing a paper PSLF form to the Department of Education.
Recent Changes to PSLF Under the Trump Administration
The Trump administration’s Public Service Loan Forgiveness changes aren’t in full effect yet, though they’re in motion. On March 7, 2025, President Donald Trump signed an executive order to exclude certain organizations from being qualifying employers under PSLF. These include organizations that engage in:
“… illegal activities, including illegal immigration, terrorism, chemical and surgical castration or mutilation of children, child trafficking, illegal discrimination, and a pattern of violating state laws…”
According to Forbes, many legitimate organizations could be targeted by this proposal, including nonprofits whose mission simply disagrees with the administration, health care nonprofits that provide gender-affirming care to minors, those that continue with DEI initiatives, legal groups that support peaceful (nonviolent) protests against government policy, and more. Critics argue the order is unconstitutional and illegal, likely triggering lawsuits, though changes are not yet in effect.
The Notice of Proposed Rulemaking for this provision was opened for public comment starting on August 18, 2025.
In addition to this PSLF program news, President Trump signed the One Big Beautiful Bill (OBBB) Act into law on July 4, 2025. For loans borrowed before July 1, 2026, the OBBB sunsets many of the current PSLF-qualifying repayment plans by July 1, 2028. Among the list includes the Biden administration’s Saving on a Valuable Education (SAVE) Plan, Income-Contingent Repayment Plan, and Pay As You Earn Plan. It also eliminates other fixed repayment plans, like the Graduated and Extended Plans.
New federal student loans — including new federal Direct Consolidation Loans — that are borrowed or consolidated on July 1, 2026 or later will only have access to two repayment plans:
• A reworked Standard Repayment Plan that sets borrowers’ repayment period based on their total loan amount, or
• The Repayment Assistance Plan (RAP), a new income-driven repayment plan that’s based on borrowers’ adjusted gross income (AGI), with a $50 monthly reduction per dependent.
Who Is Most Affected by the New PSLF Restrictions?
These new PSLF changes restrict some existing borrowers from achieving loan forgiveness through PSLF. Borrowers who are immediately impacted by the limitations are those who made student loan payments while employed by an organization that falls under the Trump administration’s exclusion definition.
Trump’s exclusion definition disqualifies employers that have engaged in illegal activities on or after July 1, 2026. This includes organizations that disagree with the Trump administration, legal defense organizations, health care nonprofits, and even some colleges and universities who allow pro-Palestinian protests, for example.
Any payment progress they made might no longer meet the “qualifying employer” provision under new PSLF rules and could push back forgiveness longer.
How These Changes Could Affect Future Borrowers
The next subset of borrowers who might be significantly affected by the Trump administration’s PSLF changes are new borrowers, specifically those who borrow a new loan on or after July 1, 2026. The PSLF-qualifying repayment plans that borrowers can choose from for these new loans are limited to two options: the revamped Standard Repayment Plan or RAP, the only remaining income-driven plan option available.
The RAP calculates monthly payments based on borrowers’ AGI, reducing payments by $50 for each dependent, and offers forgiveness after 30 years of qualifying payments. The minimum monthly payment is $10, including for borrowers who fall well below the poverty line.
By comparison, current income-driven repayment plans have a repayment period of 20 or 25 years, and they calculate payments based on borrowers’ discretionary income and family size, which could result in a $0 monthly payment — generously offering relief to borrowers with large families.
What You Can Do If You’re Relying on PSLF
The next steps to consider greatly depend on where you are along your PSLF journey. Whether you’re just thinking about a career in public service or are already pursuing PSLF, here are a few ways to prepare for the upcoming Public Service Loan Forgiveness changes.
Keep Accurate Documentation
Track all activity related to your federal student loans. This includes gathering key documents such as your loan’s promissory note, payment confirmations, employment records, and detailed logs of communications with your servicer, including dates, times, and the names of representatives you spoke with.
Consider downloading your StudentAid.gov loan account details quarterly — including outstanding balances, loan statuses, etc. — and keeping this, and the information above, in a secure, digital folder for quick reference.
Explore Refinance as a Backup Option
Understanding all of your repayment options, including student loan refinancing, can help you make an informed decision about your student debt repayment. A student loan refinance is offered through a private lender. Your existing private and/or federal student loans are paid in full by the private lender, and a new refinance student loan is created in the amount that was paid on your behalf.
The new loan will have a new rate and new repayment terms. Although refinancing is an option if the PSLF changes affect you, it’s important to weigh the pros and cons of refinancing federal student loans before moving forward. Upon refinancing your federal student loans, you’ll forfeit impactful federal benefits, including Public Service Loan Forgiveness, income-driven repayment plans, and student loan deferment.
Recommended: Should I Refinance My Federal Student Loans?
Speak with a Loan Servicer or Counselor
Speaking with a loan servicer or counselor is crucial for those relying on Public Service Loan Forgiveness, as it helps ensure that you are on the right track to meet the program’s requirements. These professionals can provide guidance on eligible loans, employment verification, and the necessary forms to submit, which can be complex and vary over time, especially with the recent changes being proposed.
The Takeaway
For public servants hoping to reach student loan forgiveness, Trump administration changes to the definition of a “qualifying employer” and eligible PSLF repayment plans might feel unsettling. Fortunately, the legislation under the OBBB doesn’t go into effect overnight. Current borrowers have a three-year runway to determine the best course of action for their unique situation.
In the meantime, students should stay connected to their student loan servicer regarding any changes that may take place regarding Public Service Loan Forgiveness.
Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.
FAQ
What is Public Service Loan Forgiveness (PSLF), and who qualifies?
Public Service Loan Forgiveness is a program that offers tax-free federal student loan forgiveness. To qualify for PSLF, borrowers must make 120 qualifying payments while enrolled in an eligible repayment plan and working full-time for a qualifying employer. The latest PSLF program news signals changes to the eligibility criteria in the coming years, but these anticipated restrictions aren’t in effect yet.
How did the Trump administration change the PSLF program?
The Public Service Loan Forgiveness changes led by the Trump Administration include reducing PSLF-qualifying repayment plan options, and limiting PSLF eligibility by redefining which employers qualify. For example, excluding employers that “engage in activities that have a substantial illegal purpose” such as illegal immigration and terrorism.
Who is most affected by the new PSLF restrictions?
Borrowers who plan on taking out new federal student loans after July 2026, and current PSLF-enrolled borrowers who are employed by an organization that is excluded from the PSLF program are most impacted by the latest PSLF restrictions.
What should I do if I was planning to use PSLF but no longer qualify?
Technically, the PSLF changes aren’t in full effect yet, so no urgent action is required. However, current borrowers who were pursuing PSLF, but whose employer no longer qualifies under PSLF, could explore whether loan forgiveness through an income-driven repayment plan makes sense for their situation. The IDR forgiveness path isn’t contingent on working for a qualifying employer, but it can take up to 30 years to qualify for loan forgiveness, and you might be liable for taxes on the forgiven amount.
Can refinancing my student loans affect my eligibility for forgiveness?
Yes, refinanced federal student loans are ineligible for loan forgiveness through the Education Department. A student loan refinance is provided by a private lender so it isn’t a qualifying education loan for federal loan forgiveness.
photo credit: iStock/designer491 SoFi Loan Products
SoFi Student Loan Refinance
Terms and conditions apply. SoFi Refinance Student Loans are private loans. When you refinance federal loans with a SoFi loan, YOU FORFEIT YOUR ELIGIBILITY FOR ALL FEDERAL LOAN BENEFITS, including all flexible federal repayment and forgiveness options that are or may become available to federal student loan borrowers including, but not limited to: Public Service Loan Forgiveness (PSLF), Income-Based Repayment, Income-Contingent Repayment, extended repayment plans, PAYE or SAVE. Lowest rates reserved for the most creditworthy borrowers. Learn more at SoFi.com/eligibility. SoFi Refinance Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
SOSLR-Q325-017