The Education Department is attempting to disqualify employers it says have engaged in “illegal activities” and whose staff with student loans would no longer be eligible for debt cancellation.
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WASHINGTON – The Trump administration is moving forward with sweeping changes to a key student debt relief program that will likely trigger a court battle in the coming days.
On Thursday, Oct. 30, the Education Department finalized new rules for the Public Service Loan Forgiveness program, which allows people in specialized careers – such as nursing, firefighting, teaching and certain types of nonprofit work – to have their student debt canceled after 10 years of timely payments. The program was mismanaged for years until recently, when former President Joe Biden reformed it, ultimately forgiving billions of dollars in debt for more than 1 million Americans.
President Donald Trump has vowed to rein in PSLF. The new regulations, which have been in the works for months, would limit the types of employers whose workers would qualify to have their debt forgiven. Specifically, the rules prevent businesses and organizations that have engaged in activities with a “substantial illegal purpose” from being eligible to participate.
Yet it’s not clear exactly what the Education Department will ultimately define as an “illegal” activity. According to the new regulations, such conduct will likely include providing support for undocumented immigrants, gender-affirming care for minors, supporting “terrorism” and aiding and abetting “illegal discrimination.”
“The Public Service Loan Forgiveness program was meant to support Americans who dedicate their careers to public service – not to subsidize organizations that violate the law, whether by harboring illegal immigrants or performing prohibited medical procedures that attempt to transition children away from their biological sex,” Nicholas Kent, the education undersecretary, said in a statement.
Advocates for student loan borrowers called the new rules patently illegal and promised a lawsuit is coming.
“Instead of supporting first responders, healthcare workers, and teachers working to make our country a better place, the Trump Administration is punishing public servants for their employers’ perceived political views,” said Aaron Ament, the president of the National Student Legal Defense Network. “We will file a lawsuit in the next few days and challenge this illegal overreach.”
The regulations create an appeals process through which an employer can challenge the Education Department’s determination that it violated the law. It also establishes avenues for employers to once again qualify for PSLF, including by agreeing to a corrective action plan.
The regulations aren’t scheduled to take effect until July 1, 2026.
Zachary Schermele is a congressional reporter for USA TODAY. You can reach him by email at zschermele@usatoday.com. Follow him on X at @ZachSchermele and Bluesky at @zachschermele.bsky.social.
