WASHINGTON — The Trump administration is proposing changes to the federal Public Service Loan Forgiveness (PSLF) program that would allow the U.S. Department of Education to revoke loan forgiveness eligibility from organizations found to have violated certain federal laws, including those related to immigration and discrimination, according to a new report.
The proposed reforms, initiated through an executive order signed by President Trump, would revise eligibility criteria for the PSLF program, which currently allows public-sector workers and nonprofit employees to have their federal student loans forgiven after 10 years of qualifying payments, the Journal reported.
‘Swift Criticism’
According to the Journal, the plan has drawn “swift criticism” from advocacy groups, nonprofit leaders, and some lawmakers who argue the changes could politicize the program and create uncertainty for borrowers and employers.
“For those currently enrolled in PSLF, now is the time to stay informed and connect with the entity overseeing your participation,” Alex Beene, a financial literacy instructor at the University of Tennessee at Martin, told the Journal. “Since being introduced in 2007, the program has been one of the most popular tools the federal government has created to help students reduce debt and fill critical job roles in high-poverty areas.”
The report said changes could affect nonprofits offering services to immigrant communities or transgender youth, critics say, if those organizations are deemed in violation of federal policy. The U.S. Department of Education has convened an advisory panel to collect feedback on the proposed rulemaking.
‘Under Pressure’
Kevin Thompson, CEO of 9i Capital Group, told the Journal that the PSLF program is already under pressure due to agency staffing shortages and a growing backlog of forgiveness applications.
“Borrowers were left in the dark about their progress toward forgiveness,” Thompson said. “Add to that the layoffs within the ED and the growing backlog of applications, and it’s clear the system is under stress.”
Thompson told the Journal that although the Trump administration may seek to redefine program rules, major changes to PSLF would require Congressional action. “Executive orders alone can’t fully dismantle it,” he said.
The PSLF program was established by Congress in 2007 and has provided financial relief to thousands of public-sector employees, particularly those working in education, healthcare, and social services.
