The proposal currently has 27 Senate cosponsors, including Minority Leader Chuck Schumer and Senators Elizabeth Warren and Bernie Sanders. Once senators collect 30 signatures, the proposal can be called for a floor vote, where it will need a simple majority to pass.<\/p>\n<\/div>\n
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why it matters: <\/strong>The Trump administration rule would allow the Department of Education to strip PSLF eligibility from employers based on their mission, perceived ideological alignment, or participation in activities that the administration deems to have a “substantial illegal purpose.” Critics argue that this gives the Secretary of Education broad and subjective discretion to choose which public servants are eligible for pardon.<\/p>\nCongress created the PSLF in 2007 with bipartisan support under President George W. Bush. The program allows borrowers to receive student loan forgiveness after making 10 years of qualifying payments while working for an eligible public service employer.<\/p>\n
This new rule changes who counts as an eligible employer: potentially affecting teachers, nurses, social workers, nonprofit hospital employees and others who took low-wage jobs in exchange for that promise.<\/p>\n<\/div>\n
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Description: <\/strong>The CRA resolution would rescind the rule in its entirety and prevent the Department of Education from issuing substantially similar rules without Congressional authorization. Under the rule as written, McMahon can disqualify employers based on a “preponderance of the evidence” standard \u2013 which could include court rulings, settlements or administrative determinations without a formal trial.<\/p>\nBorrowers who work for ineligible employers after July 1, 2026 will lose the PSLF credit for payments made from that point forward. Individuals have no right to appeal the employer’s disqualification decision.<\/p>\n
The proposal is supported by more than two dozen organizations, including the NEA, AFT, SEIU, AFL-CIO, American Bar Association, Student Veterans of America, and the National Consumer Law Center.<\/p>\n<\/div>\n
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what to watch: <\/strong>Senators need 3 more signatures for a floor vote. Even if the proposal passes both houses, President Trump will almost certainly veto it, meaning Congress would need a two-thirds majority to override it. It is unlikely to pass, but there are several court cases challenging the rule.<\/p>\nBorrowers currently enrolled in PSLF should monitor for any communications from their employer regarding ineligibility. Payments made before the potential July 2026 implementation will not be affected, but employer eligibility may change.<\/p>\n
How it connects: <\/strong>College Investor has been tracking these PSLF rule changes since the proposed rulemaking phase. Our earlier coverage broke down which workers could lose PSLF under the new restrictions, and we detailed proposed rules that could prevent workers from loan forgiveness when the final rule is released. The \u201csubstantial unlawful purpose\u201d standard covers areas ranging from violating immigration law to providing transgender medical care to minors, giving the Secretary of Education broad discretion over which nonprofits and public employers remain eligible.<\/p>\n<\/div>\n\n
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