Trump’s Plan to Limit PSLF Student-Loan Forgiveness Faces New Pushback

The Trump administration is seeking to limit a major student-loan forgiveness program for public servants. Democratic lawmakers want to slam the brakes.

On Tuesday, legislators led by Sen. Tim Kaine and Rep. Joe Courtney announced a resolution under the Congressional Review Act — a fast-track mechanism to overturn federal rules — to block President Donald Trump’s looming changes to the Public Service Loan Forgiveness program.

PSLF, signed into law by former President George W. Bush in 2007, forgives student debt for government and nonprofit workers after 10 years of qualifying payments. To date, any employer in the government or nonprofit sector is eligible for the program.

The Trump administration wants to change that — at the end of 2025, it finalized a rule that would redefine what “public service” means and bar employers that engage in “substantial illegal activity.” The administration said such activities could include gender-affirming care or harboring illegal immigrants.

Courtney said in a statement that the new rule “would pick and choose which public servants are eligible for forgiveness based on the Trump Administration’s ideological agenda, which clearly goes against Congressional intent.”

The rule would take effect on July 1.

“With this new rule, the Trump Administration is refocusing the PSLF program to ensure federal benefits go to our Nation’s teachers, first responders, and civil servants who tirelessly serve their communities,” Undersecretary of Education Nicholas Kent previously said in a statement.

If the department determines an employer engaged in illegal activity, the employer would be notified and given an opportunity to rebut the findings. If the employer is disqualified, they can reapply to be eligible for PSLF within 10 years or enter a “corrective action plan” in cooperation with the department.

The rule has already faced legal challenges. In November 2025, a coalition of cities and nonprofits sued the administration, arguing that limiting PSLF would harm nonprofit recruitment.

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