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A federal court has blocked the Trump administration’s efforts to curb eligibility for Public Service Loan Forgiveness, but other recent changes still impact borrowers’ ability to benefit from the program.
For example, the new repayment plan would be ineligible for PSLF, potentially locking many parent borrowers out of the program entirely. These changes are part of President Donald Trump’s One Big Beautiful Bill Act, which overhauls the nation’s federal student loan system and takes effect July 1.
PSLF, signed by President George W. Bush in 2007, allows certain nonprofit organizations and government employees to cancel their federal student loans after 120 payments or 10 years. More than 9 million borrowers could be eligible, according to 2022 estimates from the nonprofit group Protect Borrowers.
Below are three recent updates to PSLF.
1. New repayment plans are not eligible.
To qualify for PSLF, student loan borrowers must enroll in a specific repayment plan.
Scott Buchanan, executive director of the Student Loan Servicing Alliance, a trade group for federal student loan servicers, said time spent in the tiered standard plan, one of the new plans established by OBBBA, will not count toward the required 120 PSLF payments. The Tiered Standard Plan includes fixed payments that are divided into different schedules based on your total debt.
For new borrowers or those who took out loans after July 1, the only repayment option to qualify for PSLF is the new repayment assistance plan. RAP is the U.S. Department of Education’s newest income-driven repayment plan (IDR), which means that a borrower’s monthly bill is set as a percentage of their income. With RAP, monthly payments typically range from 1% to 10% of revenue. The more you earn, the more payments you will need to make.
“This is especially important for people taking new loans after July 1, 2026, because the tiered standard plan is the default,” said Rich Williams, former assistant secretary of education at the Department of Education. “New borrowers who don’t actively choose a plan will be automatically placed there and won’t quietly earn PSLF credits.”
Regardless of which plan you enroll in, it will take 10 years to receive forgiveness.
nancy nearman
EDCAP Assistant Director
Existing student loan holders who take advantage of PSLF will be able to choose from more repayment plans, including income-based repayment plans (IBR), said Nancy Nierman, assistant director of the New York Education Debt Consumer Assistance Program, a nonprofit that helps borrowers repay their loans. That’s why you should compare monthly bills across available IDR plans and choose the cheapest option, she said.
Nearman added that if you want PSLF to forgive your debt, you should generally ignore the forgiveness clause in your IDR plan. For example, RAP only completes debt forgiveness after 30 years.
But for PSLF borrowers, “no matter what plan you’re in, it takes 10 years to get forgiveness,” she said.
2. Parent PLUS borrowers may be locked out
Due to OBBBA changes, many parents who take out student loans for their children’s higher education no longer qualify for PSLF. This is because, by law, Parent PLUS borrowers are locked out of IDR access.
“Parent PLUS loans no longer have income-driven repayments or a path to PSLF,” Williams said.
Parent borrowers who took out loans after July 1 are currently eligible only for the graduated standard repayment plan and will not count towards PSLF.
Meanwhile, existing Parent PLUS loan holders recently had a short window to consolidate their debts and maintain the possibility of enrolling in an IDR plan. Consolidating Parent PLUS loans leaves the borrower with a direct federal loan, like most students have.
But if you don’t, you’ll lose access to an IDR plan and therefore no longer able to benefit from PSLF, experts say.
3. Employers should not disqualify you
Student loan borrowers no longer have to worry about whether their employer will maintain their PSLF eligibility. That’s because in June, two federal judges struck down a Trump administration rule that changed the definition of “eligible employer” under PSLF to exclude organizations that “engage in illegal activities.”
Opponents of the policy argued that the vague language would allow the Trump administration to shut down nonprofits it doesn’t like.
“The administration may appeal this decision, but they haven’t said anything since this rule was repealed,” Nierman said. “If they appeal, there’s no guarantee they’ll win.”
The Department of Education recently wrote on its website that it is working on updating PSLF forms to comply with the court order, but that “language regarding an employer’s certification that it has not engaged in illegal activity is ineffective.”
The best way to find out if your job qualifies for PSLF is to fill out what’s called an Employer Certification Form. Experts say it’s best to fill out this form at least once a year and keep a record of your verified qualifying payments.
