FILE-Student loan borrowers gather near The White House for a cancel student debt protest. (Photo by Paul Morigi/Getty Images for We, The 45 Million)
The Department of Education is finalizing a rule that will make it challenging for student loan borrowers working in public service jobs to access the Public Service Loan Forgiveness (PSLF) program.
This move follows President Donald Trump’s executive order in March for changes to the program, declaring it had "misdirected tax dollars into activist organizations" that harm national security.
Under the PSLF program, student loan debt is forgiven for government and nonprofit employees after 10 years of qualifying payments are made.
What’s the reason behind the changes to the PSLF rule?
Why you should care:
The Department of Education released a fact sheet explaining that the final rule improves the definition of a qualifying employer "to exclude employers that participate in illegal activities such that they have a substantial illegal purpose."
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The Education Department listed examples of illegal activities in the fact sheet that could make an employer ineligible under the PSLF such as supporting terrorism or involvement in violence to influence government policy, aiding and abetting illegal discrimination, immigration law violations, trafficking and violating child abuse laws, transgender issues, and a "pattern" of state law violations.
According to the fact sheet, the final rule will take effect on July 1, 2026 and the Department of Education secretary will decide if an employer no longer qualifies for Public Service Loan Forgiveness (PSLF) if they violate the above infractions and employers will receive a notice with a chance to challenge the Education Department’s findings.
How does the Public Service Loan Forgiveness program work?
The backstory:
The Public Service Loan Forgiveness program (PSLF) forgives the remaining balance on student borrowers loans after they have made 120 (10 years) qualifying monthly payments under a qualifying repayment plan, while working full-time for a qualifying employer, according to studentaid.gov.
RELATED: Trump order aims to deny student loan relief to some borrowers
Congress created the PSLF program in 2007 to forgive the student loans of people who work in a public service job and have made at least 10 years of payments on their loans.
Individuals who work for the federal, state, local or tribal government and most non-profit employees are eligible for PSLF, as well as workers of other public entities, including public colleges, schools, and the military.
The Source: Information for this story was provided by a Department of Education fact sheet outlining the new rules and previous LIVENOW from FOX reporting. This story was reported from Washington, D.C.