The Notice of Proposed Rulemaking, published in the Federal Register and scheduled to take effect July 1, 2026, follows President Trump's March executive order directing the Department of Education to revise PSLF eligibility criteria. The proposed changes would give the Secretary of Education broad authority to determine which employers qualify for the program that has provided loan forgiveness to more than one million public servants.
Under the proposed rule, organizations could lose PSLF eligibility for activities including "aiding or abetting violations of Federal immigration laws," "engaging in a pattern of aiding and abetting illegal discrimination," or "engaging in violence for the purpose of obstructing or influencing Federal Government policy." The Department would use a "preponderance of evidence" standard to make determinations, and employers found ineligible would face a 10-year waiting period before they could regain qualifying status.
The rule specifically targets several types of activities the administration considers problematic, including providing certain medical treatments to transgender minors, assisting with immigration cases, and various forms of protest activity that result in state law violations such as trespassing or disorderly conduct.
Kristin McGuire, President and CEO of Young Invincibles, characterized the proposal as "continuing its attacks on education, deliberately targeting advocacy organizations whose work doesn't align with its ideological agenda."
"By using a distorted and overly broad definition of 'illegal activities,' the Trump administration is exploiting the student loan system to attack political opponents," McGuire said. "This is an illegal move by the administration; eligibility for Public Service Loan Forgiveness (PSLF) is defined by law, not political ideology."
The proposed rule emerged from a contentious negotiated rulemaking process that concluded in July without consensus. According to the Department's documentation, the negotiator representing civil rights organizations dissented from the draft regulations, preventing the committee from reaching agreement.
