Forgiveness for the Few: The New PSLF
This guest post does not necessarily reflect the views or expertise of Human Rights First. It is part of a partnership between UCLA Law and Human Rights First, where UCLA Law students use the new Democracy Watch tracker to analyze legislative threats to democracy.
As of October 2024, over 1 million public service workers have had their student loan debt forgiven via the Public Service Loan Forgiveness program (PSLF). President Trump’s recent executive order threatens to hinder this progress and limit the number of public service employees that can benefit from PSLF.
PSLF has had a rocky history. It was signed into law during President George W. Bush’s second term as part of the 2007 College Cost and Reduction Act. The program essentially promises to forgive the remaining student loan debt of employees working in public service, after they complete 10 years of service while making 10 years of minimum payments in those qualifying public service jobs. The intention behind the program was to encourage the nation’s best and brightest to use their skills to serve the public in schools, hospitals, nonprofit organizations etc., but the program itself was mired in administrative issues, such as loan servicers not letting students know they qualified for PSLF and clerical errors by loan servicers. In its first ten years of existence, over a million students had taken steps to receive PSLF, but by 2018, over 890,000 borrowers applied for the program, yet only 55 had successfully been granted loan forgiveness. During President Trump’s first term, the PSLF program had a 99% application rejection rate in 2019.
The Biden administration made significant reforms to PSLF by allowing borrowers to receive credit for past periods of repayment, streamlining the employment certification process, and simplifying eligibility requirements and the application process itself. These reforms led to the dramatic increase in loan forgiveness granted through PSLF, from 55 acceptances in 2018 to over 1 million applicants with forgiven debt in 2024.
This upward trend brought hope to many in the public sector, but this hope may soon be dashed. President Trump’s March 7 “Restoring Public Service Loan Forgiveness” executive order does not bode well for America’s public service workers.
The order threatens to limit the scope of which organizations qualify for PSLF, instructing Secretary of Education Linda McMahon to exclude from the program organizations “aiding or abetting violations of 8 U.S.C. 1325 or other Federal immigration laws” and those that support “terrorism, including by facilitating funding to, or the operations of, cartels designated as Foreign Terrorist Organizations consistent with 8 U.S.C. 1189, or by engaging in violence for the purpose of obstructing or influencing Federal Government policy.”
While seemingly innocuous when taken without context, these restrictions will potentially harm organizations that do not align with President Trump’s policies and Project 2025 agenda. For instance, immigration aid organizations will likely no longer be counted as qualified employers on PSLF, which means employees at these kinds of organizations who were relying on the PSLF program will be financially harmed. Employees at Palestinian rights organizations will also be similarly affected since President Trump and his administration regularly conflate support for Palestine as support for terrorism and Hamas, evidenced by the recent arrests of pro-Palestine students.
Moreover, this so-called reform may especially impact people of color, especially Black students, who relied on the promise of PSLF when making their career decisions, and are now stuck with debt they reasonably believed would be forgiven, furthering the preexisting economic inequality in the country that leaves students of color with higher rates of student loan debt than white students. This effect will eventually cause employees working in advocacy, nonprofit, legal aid and other types of previously qualifying organizations to leave their jobs in the public sector for higher-paying private sector jobs due to financial necessity.
This executive order will chill the expression of free speech and leave many students, employees, and organizations out in the cold financially.
Raafiya Ali Khan is a law student at UCLA School of Law. She is interested in public interest law, particularly constitutional, civil, and international human rights law. Prior to law school, she worked at a nonprofit focused on advancing gender and racial equity in employment and higher education. She graduated from the University of California, San Diego with a B.A. in Composite Literature.
