Restoring Public Service Loan Forgiveness
Signed: March 7, 2025
Published: March 12, 2025
Document Number: 2025-04103
📋Summary
This executive order directs the Department of Education to change the rules for Public Service Loan Forgiveness (PSLF) so that some jobs at certain organizations no longer count as “public service” for loan forgiveness. It affects student loan borrowers seeking PSLF and the employers whose work would be excluded under the revised definition. The order tells the Education Department (coordinating with Treasury as needed) to propose regulations excluding organizations that have a “substantial illegal purpose,” including those involved in helping violate federal immigration laws, supporting terrorism or cartel operations, certain forms of child abuse or trafficking, patterns of illegal discrimination, or repeated violations of certain state laws like trespassing, vandalism, or blocking highways. It also states the changes must be carried out within existing legal authority and available funding, and it does not create a new legal right for individuals to enforce in court.
💼Business Impact
This order most directly affects **nonprofits, NGOs, advocacy groups, and government-adjacent contractors** that rely on PSLF as a recruiting/retention tool—especially organizations working in **immigration services, protest/legal support, civil rights enforcement, and politically sensitive social services**—because the Department of Education is directed to narrow “public service” to exclude employers deemed to have a “substantial illegal purpose.” Businesses may face new **compliance and documentation expectations** (e.g., proving lawful operations, governance controls, and that staff activities don’t “aid or abet” prohibited conduct) and an **opportunity** for compliant public-sector employers (schools, hospitals, municipalities, traditional 501(c)(3)s) to differentiate themselves in hiring by clearly confirming PSLF eligibility. Immediate actions: **audit your programs and partnerships** for any activities that could be characterized as facilitating illegal conduct; **tighten policies/training** (employee conduct, protest participation on work time, client assistance boundaries, subcontractor oversight); and **update recruiting/benefits communications** to avoid promising PSLF eligibility until the revised regulations are issued and your organization’s status is clear.
Full Text
Executive Order 14235 of March 7, 2025
Restoring Public Service Loan Forgiveness
By the authority vested in me as President by the Constitution and the laws of the United States of America, it is hereby ordered:
Section 1 . Purpose. In 2007, the Congress established the Public Service Loan Forgiveness (PSLF) Program to encourage Americans to enter the public service sector by promising to forgive their remaining student loans after they completed 10 years of service in those jobs while making 10 years of minimum payments.
The prior administration abused the PSLF Program through a waiver process, using taxpayer funds to pay off loans for employees still years away from the statutorily required number of payments. Moreover, instead of alleviating worker shortages in necessary occupations, the PSLF Program has misdirected tax dollars into activist organizations that not only fail to serve the public interest, but actually harm our national security and American values, sometimes through criminal means. The PSLF Program also creates perverse incentives that can increase the cost of tuition, can load students in low-need majors with unsustainable debt, and may push students into organizations that hide under the umbrella of a non-profit designation and degrade our national interest, thus requiring additional Federal funding to correct the negative societal effects caused by these organizations' federally subsidized wrongdoing.
As President of the United States, I have a duty to protect, preserve, and defend the Constitution and our national security, which includes ending the subsidization of illegal activities, including illegal immigration, human smuggling, child trafficking, pervasive damage to public property, and disruption of the public order, which threaten the security and stability of the United States. Accordingly, it is the policy of my Administration that individuals employed by organizations whose activities have a substantial illegal purpose shall not be eligible for public service loan forgiveness.
Sec. 2 . Restoring Public Service Loan Forgiveness. The Secretary of Education shall propose revisions to 34 CFR 685.219, Public Service Loan Forgiveness Program, in coordination with the Secretary of the Treasury as appropriate, that ensure the definition of “public service” excludes organizations that engage in activities that have a substantial illegal purpose, including:
(a) aiding or abetting violations of 8 U.S.C. 1325 or other Federal immigration laws;
(b) supporting terrorism, including by facilitating funding to, or the operations of, cartels designated as Foreign Terrorist Organizations consistent with 8 U.S.C. 1189, or by engaging in violence for the purpose of obstructing or influencing Federal Government policy;
(c) child abuse, including the chemical and surgical castration or mutilation of children or the trafficking of children to so-called transgender sanctuary States for purposes of emancipation from their lawful parents, in violation of applicable law;
(d) engaging in a pattern of aiding and abetting illegal discrimination; or
(e) engaging in a pattern of violating State tort laws, including laws against trespassing, disorderly conduct, public nuisance, vandalism, and obstruction of highways. ( printed page 11886)
Sec. 3 . General Provisions. (a) Nothing in this order shall be construed to impair or otherwise affect:
(i) the authority granted by law to an executive department or agency, or the head thereof; or
(ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.
(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.
(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
THE WHITE HOUSE,
March 7, 2025.