U.S. Department of Education
08/18/2025 | Press release | Distributed by Public on 08/18/2025 07:05
U.S. Department of Education Issues Proposed Public Service Program Rules to Protect American Taxpayers
August 18, 2025
The U.S. Department of Education today issued a Notice of Proposed Rulemaking (NPRM) that would prevent benefits under the taxpayer-funded Public Service Loan Forgiveness (PSLF) program from being improperly provided to borrowers whose employers are engaged in activities with a substantial illegal purpose.
The proposed rules would halt PSLF benefits to employees of organizations that are undermining national security and American values through illegal means, and therefore not providing a public service. Organizations that engage in activities that have a "substantial illegal purpose," such as supporting terrorism, aiding or abetting discrimination or violations of immigration laws, or child abuse, would be excluded as qualifying PSLF employers under the proposed changes.
"President Trump has given the Department a historic mandate to restore the Public Service Loan Forgiveness program to its original purpose-supporting public servants who strengthen their communities and serve the public good, not benefiting businesses engaged in illegal activity that harm Americans," said Under Secretary of Education Nicholas Kent. "The federal government has a vital interest in deterring unlawful conduct, and we're moving quickly to ensure employers don't benefit while breaking the law."
Following President Trump's Restoring Public Service Loan Forgiveness Executive Order in March, the Department gathered public feedback at two public hearings in May and convened a negotiated rulemaking committee of borrowers and other higher education stakeholders last month to review draft regulations. The Department drafted the NPRM based on that feedback and extensive discussions with stakeholders.
To see the full NPRM, click here.
Comment Period
Comments on the proposed rules can be submitted through the Federal eRulemaking Portal at www.regulations.gov. The Department will not accept comments submitted by fax or by email or comments submitted after the comment period closes. The Department must receive comments on or before September 17, 2025.
Background:
Section 492 of the Higher Education Act requires that the Secretary of Education solicit public involvement in the development of proposed regulations before publishing a Notice of Proposed Rulemaking implementing programs authorized under Title IV. After obtaining advice and recommendations from the public and stakeholders, the Secretary conducts Negotiated Rulemaking to develop the proposed regulations.
On March 7, President Trump signed the Restoring Public Service Loan Forgiveness Executive Order, directing the Secretary to propose revisions to the PSLF program and to ensure the definition of "public service" excludes organizations that engage in activities that have a substantial illegal purpose.
On May 12, the Department announced its intention to establish a committee to prepare proposed regulations to implement changes to the PSLF program.
On July 2, the Department concluded the negotiated rulemaking session after three days of negotiations, with an overwhelming majority of the committee voting in support refining the qualifying employer definition for PSLF. Only one committee member objected, preventing the committee from reaching consensus.
For more information on the negotiated rulemaking process, see here.
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