How Trump’s Proposed Changes to PSLF Could Affect Your Loan Forgiveness

The Public Service Loan Forgiveness (PSLF) program is a form of student loan relief. An executive order signed by President Donald Trump on March 7, 2025, seeks to limit who can qualify for loan forgiveness by changing what counts as public service. If these changes are implemented, borrowers working in sectors that oppose the administration’s agenda may be disqualified from PSLF.

Key Takeaways

• President Trump signed an executive order with instructions to revise who qualifies for the Public Service Loan Forgiveness (PSLF) program.
• Its aim is to deny PSLF eligibility for those working under organizations that the administration claims harm American values.
• Although the order was signed, the proposed changes have yet to be implemented.

Note

Established in 2007, the Public Service Loan Forgiveness (PSLF) program forgives the remaining balance on federal direct loans for qualifying full-time public servants, so long as they’ve made 120 monthly payments (10 years) on time through an income-driven repayment (IDR) plan.

Understanding the PSLF Executive Order

The executive order directs Secretary of Education Linda McMahon to make revisions to the term “public service” to exclude organizations engaging in activities with what it refers to a “substantial illegal purpose.”

This includes agencies that the administration says aid and abet violations of federal immigration laws; support terrorism, either as determined by the secretary of state or by engaging in “violence for the purpose of obstructing or influencing Federal Government policy”; support child abuse, including the “trafficking of children to so-called transgender sanctuary States”; aid and abet illegal discrimination; and violate “laws against trespassing, disorderly conduct, public nuisance, vandalism, and obstruction of highways.”

It’s important to remember that Trump’s executive order doesn’t directly alter the Public Service Loan Forgiveness (PSLF) program. PSLF is a part of federal law, which means it can only be changed or undone by Congress—not by the president. Rather, it’s instructing the United States Department of Education and the Treasury Department to propose regulatory changes making certain public-sector employees ineligible for taxpayer-funded student loan forgiveness.

Which Public Service Jobs Are Affected?

The language in the executive order is somewhat vague as to who should be affected. The goal, according to the administration, is to keep taxpayer funds from being directed to organizations that purportedly harm American values.

While it doesn’t specify which nonprofit sectors could be at risk, the order seems to target groups that are involved in one or more of the following issues:

• Immigration and the rights of immigrants, undocumented people, migrants, refugees, and asylum seekers
• Protecting transgender individuals and ensuring access to gender-affirming care
• Engaging in protests and other forms of activism that the administration considers “violent” or “anti-American”

Federal employees aren’t explicitly named in Trump’s executive order, but they aren’t excluded either. Because they work in the public sector, there’s a chance that they could be also impacted if these changes are implemented.

Although Trump signed the executive order, there’s no definitive time frame for when the proposed changes would go into effect. According to Federal Student Aid, the executive order is currently under review, and you aren’t required to take any action if you’re a potentially affected borrower.

The Bottom Line

The PSLF program is designed to give qualifying public sector workers relief from their student loan debt. However, President Trump’s executive order promises to change that for those working in certain organizations. While no alterations have been implemented yet, affected borrowers may eventually find themselves disqualified for the loan forgiveness that they spent years working toward.