Topline
The Department of Education finalized rules that would bar employees working for certain employers it says have a “substantially illegal purpose” from receiving Public Service Loan Forgiveness, in particular targeting organizations that work with illegal immigrants and transgender children.
Employees of organizations that work with illegal immigrants or “transition children” will no longer qualify for loan forgiveness after 10 years of payments.
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Key Facts
The new rules, which were finalized on Thursday, were designed to ensure the government doesn’t “subsidize illegal activity,” Under Secretary of Education Nicholas Kent said in a statement, specifically singling out organizations who support “harboring illegal immigrants or performing prohibited medical procedures that attempt to transition children away from their biological sex.”
Instead, Kent said the rules were designed to benefit individuals who work as “teachers, first responders and civil servants.”
The new rules are scheduled to go into effect on July 1, 2026, after which payments made by employees of disqualified organizations toward student loans will no longer count toward the 120 monthly payments needed for loan forgiveness.
If an organization is disqualified from the PSLF program, they will have the right to appeal that ruling.
They were designed to follow an executive order signed by President Donald Trump in March instructing Secretary of Education Linda McMahon to make similar changes.
What Organizations Will The New Rules Disqualify?
The Department of Education did not identify any specific organizations. However, the 185 pages of new rules identified at least six areas where organizations could be disqualified, including “aiding and abetting violations of federal immigration laws,” “supporting terrorism,” and engaging in “trafficking children.” The rules do not explicitly go after transgender advocacy groups or nonprofits, but instead bar those “engaging in the chemical and surgical castration or mutilation of children.” They also bar organizations “engaging in a pattern of aiding and abetting illegal discrimination”—and the Trump administration has used anti-discrimination law to target and dismantle diversity, equity and inclusion initiatives. The rules also say the department would examine if organizations were violating state laws, including “trespassing, disorderly conduct, public nuisance, vandalism, and obstruction of highways”—all crimes that could be associated with large public protests.
Key Background
Public Service Loan Forgiveness was introduced in 2007 in a bill signed into law by former President George W. Bush. The program cancels student loans for public service employees who make monthly payments for ten years. The Biden administration made student debt relief a centerpiece of their agenda, and used waivers to allow more people to qualify for the PSLF program. Over 1 million people received student debt relief through the PSLF program after the changes, the Associated Press reported. The Trump administration has repeatedly criticized
Further Reading
Source: https://www.forbes.com/sites/zacharyfolk/2025/10/30/trump-administration-limits-student-loan-forgiveness-for-some-public-service-organizations/
