The Issue

In 2007, President George W. Bush signed the bipartisan Public Service Loan Forgiveness (PSLF) program into law to encourage college graduates to pursue careers in service of the common good. Through the program, social workers, educators, researchers, public-interest lawyers, nurses, and museum curators working 10 years in the nonprofit sector can earn forgiveness on eligible student loans. The program forgives the remaining balance on borrowers’ direct loans after 120 monthly payments have been made under an accepted repayment plan while working full-time for a qualifying employer. Qualifying employers include U.S. federal, state, local, or tribal governments or 501(c)(3) nonprofit organizations.

Over the years, minor adjustments have been made to improve access and expand eligibility, ensuring more public servants can benefit. In October 2021, the U.S. Department of Education settled a lawsuit with the American Federation of Teachers (AFT), acknowledging and attempting to remedy various failures in the management of PSLF. The settlement provides a review of previously denied applications and gives program participants more information about qualifying for forgiveness. Listen to Independent Sector’s 2019 podcast episode with one of the lawyers who secured this victory.

Late on March 7, 2025, the Trump-Vance administration issued an executive order calling to exclude organizations with a “substantial illegal purpose” from serving as eligible employers under PSLF. However, executive orders cannot change the law and the law is already clear: Working for any 501(c)(3) organization is a PSLF-qualifying public service job, and engaging in illegal activity is already grounds for an organization to lose its 501(c)(3) status.

What’s at Risk?

Public service professionals, like nonprofit employees, deliver services to the communities that need them the most and help uplift families across the nation.  By offering these professionals relief from their student loans, PSLF helps to close the wage gap between the nonprofit and private sectors.

Improving this program strengthens nonprofits’ ability to deliver high-impact programs that ensure healthy, thriving communities. It enables nonprofits to recruit and retain top talent, because our employees can have more confidence that their student debt will not hinder their long-term financial goals.

While the executive order from the Trump-Vance administration should not affect PSLF program eligibility without additional action from Congress, it serves to further destabilize an already contentious landscape for public service professionals.

In enacting the PSLF program, all branches of government made a promise to these workers to forgive their debt after 10 years of service and consistent loan payments. It is essential that this program be protected and made easier to access, not harder, for the nonprofit workforce and other public service workers who have upheld their end of the bargain, made their required payments, and dedicated their careers to serving their communities.