Student Loan Update: Trump Admin Takes New Step to Limit Forgiveness
Summary
The Trump administration is trying to limit who can qualify for the Public Service Loan Forgiveness (PSLF) program, which cancels student loan debt after 10 years of qualifying payments. The Department of Education is appealing a court ruling that blocked their effort to restrict which employers count as qualifying workplaces for loan forgiveness.Key Facts
- The PSLF program forgives federal student loans for government and nonprofit employees after 120 qualifying payments.
- The Department of Education under President Trump wants to narrow eligibility by excluding employers involved in activities they view as illegal or not proper public service.
- The proposed rule could disqualify organizations supporting illegal immigration, terrorism, or gender-affirming care services.
- Two federal judges blocked the rule earlier this summer, ruling that Congress did not give the Education Department authority to make these decisions alone.
- The Education Department is appealing the court rulings to try to enforce the new rule.
- Current borrowers remain eligible for PSLF under existing standards while the appeal is ongoing.
- If the appeal succeeds, some workers might lose credit for their loan payments because their employer no longer qualifies.
- Borrowers must work full time for a qualifying employer and have eligible federal loans to pursue PSLF.
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