Eliza Haverstock, Nald Wallet
On March 7, President Donald Trump signed an executive order that sought to restrict the eligibility of public service loan exemptions (PSLFs). The Secretary of Education has directed that they write a proposal to remove PSLF eligibility for borrowers working in organizations that serve “substantially illegal purposes.”
Despite the strong language of orders, at this point, no borrower is at the immediate risk of losing PSLF eligibility. The program allows borrowers federal student loans after making 10 years of payments while working in public services, including teachers, firefighters, police officers, health workers, government workers and other nonprofit employees.
“You’re right to be surprised, but it’s just a directive to dig into what the executive order is saying now and change the language (in the PSLF) in the future,” says Stanley Tate, a lawyer specializing in student debt. “It’s not yet written how that actually unfolds. If so, there’s response from a variety of advocacy groups interested in protecting borrowers.”
Still, there are steps that PSLF-qualified borrowers can take right now to prepare for uncertainty. This starts by understanding what the executive order is doing, which borrowers are targeting, and how to track your PSLF progress.
»More information: How President Trump affects student loan borrowers
What does PSLF presidential order do?
The executive order directs Director of Education Linda McMahon to develop a proposal that limits the eligibility of the PSLF. In a March 10th post on Social Media Network X, the education department wrote:
On March 12, a spokesperson for the Department of Education said in an email: “President Trump’s executive order will restore the PSLF program to statutory terms and will not allow the PSLF to fund anti-American activists. The executive order has a narrow purpose to ensure that certain nonprofits do not qualify for PSLF and do not direct other changes to the program. The department is considering the executive order and ensures that the program is effectively managed for those who are intended to provide services.”
But Tate says he suspects that the order can be legally enforced, as written. The PSLF is established by law and cannot be changed unilaterally by the President. Congress must vote for the change. The program has been gaining bipartisan support since 2007 when former Republican President George W. Bush signed the law.
Trump’s executive order “instructs the education department to find ways to change languages so that these organizations do not allow them to participate in things in this category,” Tate says. “But how do you actually do that, what kind of evidence are you looking for? I think it’s just leading to a lawsuit and ultimately leads to anywhere.”
»More: With the education sector under threat, here are what student loan borrowers can do
Which public service jobs are targeted?
The PSLF executive order does not specify which nonprofit organizations are at risk. Instead, they call for a wide range of sectors or activities that the Trump administration has repeatedly targeted: migrant and refugee aid, support for transgender youth, gender-affirming care, and groups advocating for diversity and inclusion. They also want to rule out nonprofits involved in protests and “supporting terrorism.”
However, the 2007 law that created the PSLF does not allow the government to choose which nonprofit organizations are included in the program. Eligible borrowers are defined as those who work in areas such as law enforcement, education, and social services, and those who work in nonprofits with a 501(c)(3) status. Trade unions and partisan political groups were not eligible for the PSLF.
Tate says he hasn’t seen how Trump’s orders affect government employees or 501(c)(3) organizations, as they are explicitly written in the original PSLF Act. Congress must act to change its language.
However, the education sector has interpreted the PSLF Act to extend eligibility to certain non-501(c)(3) organizations providing public services. Employers of these non-501(c)(3) organizations may face higher risk, Tate says. It may include several groups that provide legal assistance or immigration assistance.
What might happen next?
Student borrower advocacy groups may challenge executive orders in lawsuits. For example, President Randy Weingern of the American Federation of Teachers said in a statement on March 7th that “first is not to stop the fight in court or Congress until all public service workers in court have their support.”
Daniel Collier, an assistant professor of higher education at the University of Memphis, has studied the effects of PSLF on borrowers, but says he suspects the order will hold up in court.
However, the action could significantly block individuals from exercising their freedom of speech for fear of losing PSLF eligibility, and could undermine the ability of certain nonprofits to recruit employees, Collier said.
The Trump administration was also able to hamstring the PSLF outside of this executive order. Collier, for example, says he is worried that the education department will mismanage PSLF due to inability to handle borrowers’ forgiveness or payment errors.
At some point during Trump’s first term, 99% of PSLF applications were denied, according to a 2019 review by the Government’s Accountability Office. By the time Trump took office in 2020, only 7,000 people had received the PSLF. The Biden administration has made PSLF eligibility easier, bringing $78.5 billion student loan forgiveness for more than 1 million civil servants.
»News: Unpacking Trump’s Executive Order
What should a borrower eligible for PSLF do now?
At this point, do not make any financial or career moves under this executive order.
“I can’t stress enough. Of course, don’t make decisions based on the growing emotional time,” says Kristen Ahlenius, a certified financial expert with PSLF expertise and director of advice at Money Line, a corporate financial wellness company. “Before you decide to abandon a program that you may still be, understand the reality of the situation you are in. It’s very beneficial.”
It remains to be seen which action the department will take as a result of this order. During this period of uncertainty, borrowers can now take these steps.
Download the full repayment history from dustentaid.gov and from your Federal Student Loan Servicer account. Use the PSLF Help tool to update your PSLF Employment Certification Form. Download the PSLF Payment Count and summary from your sustentaid.gov account. Check which month in your repayment history qualifies for PSLF and check for errors. If your education department does not resolve the error, consider filing a student loan complaint.
Colliers encourage borrowers to be proactive. “Download everything. Keep all receipts. You will pay and record it with the appropriate documents,” he says.
Uncertainty in PSLF can also be heavy on student loan borrowers’ mental health, Collier says. Get help if necessary.
“We start seeing a lot of downstream impacts on the mental health of individuals and how they behave and how productive they are,” Collier says. “Protect yourself and find the help you need to navigate these times.”
»Learning: How did the transfer of PSLF from Mohela to the Department of Education affect borrowers?
Eliza Haverstock writes for Nald Wallet. Email: ehaversstock@nerdwallet.com. Twitter: @elizahaversstock.
Does this mean that public service loans will no longer be forgiven? Understanding Trump’s executive orders originally appeared in Nerdwallet.
Original issue: March 14th, 2025, 3:35pm EDT
