Restoring Public Service Loan Forgiveness Executive Order #14235
POLICY UPDATE Background Congress established the Public Service Loan Forgiveness program (PSLF) in 2007 to incentivize highly skilled workers to take jobs in the public sector. Under this program, after ten years of student loan payments, the remaining loan balances for employees of government agencies and eligible nonprofits is forgiven. On March 7, 2025, President Trump signed an executive order to amend the eligibility criteria for the PSLF to exclude organizations that do diversity, equity, and inclusion work, support gender-affirming care for transgender youth, or offer services to immigrants of all legal statuses. This order, combined with the massive federal layoffs the Department of Government Efficiency has administered, will jeopardize loan forgiveness for many Black public servants, as Black people are historically overrepresented in the federal workforce. Because the order requires the Secretary of Education to amend the federal code, which is an extensive process, the order has not yet taken effect and is not currently facing any legal challenges. However, this order will have significant implications for the more than 8 million Black borrowers who currently have student loan debt. A study from the Brookings Institution found that the Black-white disparity in student loan debt more than triples four years after graduation. Student debt can delay retirement for Black workers, and high interest rates can balloon costs for lenders, which is associated with higher rates of depression and anxiety
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