President Donald Trump’s latest effort to reshape federal student loan forgiveness could face significant legal and political challenges. During a press conference on Friday, Trump announced plans to sign an executive order modifying the Public Service Loan Forgiveness (PSLF) program, aiming to exclude certain organizations from eligibility.

“If an organization is ‘not good,’ borrowers ‘wouldn’t get forgiveness’ under PSLF,” Trump said, without providing details on how his administration would determine which groups qualify. The proposal appears to target nonprofits and government organizations whose missions the administration disagrees with, though no formal list has been issued.

On Friday evening, the actual text of the executive order titled “Restoring Public Service Loan Forgiveness” was posted. The actual order simply directs the Department of Education to create new regulations to exclude specific employers from PSLF eligibility if they:

• Violate Federal immigration laws
• Support terrorism
• Support child abuse (which includes transgender care)
• Engage in illegal discrimination
• Violate state Tort laws (including laws against trespassing, disorderly conduct, and public nuisance)

However, it’s important to note that the federal rule-making process typically takes at least a year, and new rules cannot be retroactive. That means that existing qualifying payments would always count towards PSLF. Also, this also assumes that the Executive Order (or future rule-making) won’t be invalidated by the courts.

Here’s what President Trump said:

History of PSLF and Why It Can’t Be Changed by Executive Order

The Public Service Loan Forgiveness program was established under the College Cost Reduction and Access Act of 2007 and signed into law by President George W. Bush. The goal was to incentivize workers to take public service jobs by offering student loan forgiveness after 10 years of payments while working in government or at a qualifying nonprofit.

Under federal law, PSLF eligibility is based on employer type, not the employer’s mission or political stance. The Higher Education Act defines public service broadly, covering jobs in education, law enforcement, military service, public health, and nonprofit work at organizations classified as 501(c)(3) nonprofits.

Federal law does not give the executive branch the power to remove specific employers from PSLF eligibility unless Congress passes a new law to amend the program. Any attempt to rewrite these rules through executive order would likely be challenged in federal court, even if these rules go through the rule-making process.

Quick Condemnation

Mike Pierce, executive director of the Student Borrower Protection Center (SBPC), called the order a “weaponization of debt” meant to punish Americans who work in fields that don’t align with Trump’s agenda.

What Borrowers Should Expect

Borrowers who meet PSLF requirements remain eligible, and will continue to remain eligible until the final rules are in place. To qualify, they must:

• Work full-time for a qualifying employer.
• Make 120 qualifying monthly payments under a qualifying repayment plan.
• Submit an Employment Certification Form (ECF) to confirm eligibility that covers each of the 120 payments.

Borrowers should be aware that while an executive order is not enforceable directly, Congress could attempt to change PSLF through legislation. Or, if somehow the rule making process does take effect, the new rules would only apply to future payments after a certain date. It cannot be retroactive.

Some Republican lawmakers have proposed limiting eligibility or eliminating PSLF entirely as part of broader budget negotiations.

Additionally, the Department of Education’s recent pause on income-driven repayment applications could create short-term processing issues for PSLF borrowers who need to enroll in or recertify an IDR plan. This could delay progress toward loan forgiveness, particularly for new applicants.

Despite these challenges, legal experts say any major changes to PSLF will require congressional approval, and lawsuits could delay implementation for years. In the meantime, borrowers are encouraged to continue submitting employment certifications and maintaining PSLF eligibility under existing rules.

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