Democrats Launch Effort To Undo Trump’s PSLF Changes—What It Means For Borrowers

By Forbes

Democratic Sens. Tim Kaine (Va.), Kirsten Gillibrand (N.Y.) and Cory Booker (N.J.) introduced a resolution this week aiming to block the Trump administration from making some employers ineligible for the Public Service Loan Forgiveness (PSLF) program. 

Last year, the Trump administration announced that employers whose activities have what it deemed “substantial illegal purpose” won’t be eligible for the PSLF program starting July 1, 2026. The announcement cited employers who aid undocumented immigrants or provide gender-affirming care to youth among the examples. 

“Public Service Loan Forgiveness represents a promise we made to Americans who dedicate their careers to serving others,” Booker said in a release. “Efforts to weaponize that promise for political purposes or to exclude eligible public servants undermines both the integrity of the program and our commitment to public service.” 

Democratic Reps. Scott Peters (Calif.), Joe Courtney (Conn.) and Alma Adams (N.C.) have introduced a companion resolution in the House of Representatives. 

The efforts in Congress to overturn the changes may not be successful, as they face an uphill battle in both Republican-held chambers, but there are several pending lawsuits against the administration regarding the changes in eligibility to watch. If your employer does end up becoming ineligible in July, here’s what you should know and other options you can explore. 

How Can Student Loan Borrowers Prepare? 

First, know that if you’ve already made qualifying PSLF payments under an employer who becomes disqualified, you don’t lose that progress. PSLF payments don’t need to be consecutive, so you can continue making payments if your employer regains eligibility, or if you get a new job with an eligible employer. 

Winston Berkman-Breen, legal director for the consumer advocacy nonprofit Protect Borrowers, which is involved in one of the lawsuits against the Trump administration, says potentially affected borrowers shouldn’t upend their lives just yet. 

“It’s premature at this point to change your job or plan your life around the risk that your employer will be disqualified because we think we have a strong case and hope that this rule will be vacated,” he told Forbes Advisor. 

Finding another job under an eligible employer isn’t an option for everyone, Berkman-Breen added, citing specialized health care professionals who have limited workplace options in their area as one example. 

If you do end up being impacted by this rule and can’t pursue Public Service Loan Forgiveness, student loan refinancing may be an option to consider. 

While this could make your interest rate lower, it’s important to note that refinancing means losing the protections and benefits federal student loans can provide, like access to forgiveness programs and deferment or forbearance. 

Previous Pushback 

Several organizations across multiple industries have come out against the policy change, and many have joined legal action to block it. 

Among them is the California Faculty Association (CFA), which joined a lawsuit filed by the American Federation of Teachers against the Department of Education. 

“To prevent access to the program is to weaponize it against the public service workforce—the teachers, health care workers, social workers, first responders and nonprofit workers—who have been critical of the Trump administration’s attacks on equal opportunity employment, immigrant rights and gender-affirming care,” CFA Treasurer Vang Vang said in a release last November. 

American Bar Association President Michelle Behnke also opposed the decision. 

“The proposed rule suffers from a number of statutory, constitutional, and other legal defects, and reflects an improper expansion of agency authority well beyond the bounds of the statute that created PSLF,” Behnke wrote in a September comment letter. 

How Public Service Loan Forgiveness Works 

The PSLF program has discharged over $90.6 billion of student loan debt for more than 1.2 million borrowers as of early 2026. Jobs that may qualify for the PSLF program include teaching, social work, law enforcement and public health. While employer eligibility may be changing, the process for qualifying for the PSLF is not. 

You’ll be eligible for PSLF if you meet these requirements: 

Work full-time for an eligible nonprofit or U.S. federal, state, local or tribal government organization 

Have Direct Loans (or consolidate other federal student loans into a Direct Loan) 

Repay your loans under an income-driven repayment plan or a 10-year standard repayment plan  

Make a total of 120 qualifying monthly payments 

Your remaining student loans after completing these steps will be canceled as long as you work for a PSLF-eligible employer when making your final PSLF payment. 

Bottom Line 

The Public Service Loan Forgiveness program is set to change starting July 1 as the Trump administration moves to exclude organizations that aid undocumented immigrants or provide youth gender-affirming care, among other things. If your place of employment is affected, your options include finding another eligible employer or considering refinancing to a private loan, which means losing federal protections.