Today, the U.S. Department of Education concluded its negotiated rulemaking session to ensure that employers in the Public Service Loan Forgiveness Program (PSLF) are not engaging in activities that have a substantial illegal purpose. After three days of negotiations, an overwhelming majority of the committee voted to refine the definitions of a qualifying employer for the purposes of determining eligibility under PSLF.
In response to suggestions from the committee, the Department made 15 substantive changes to the regulatory language based on feedback from negotiators. At the conclusion of the meeting, only one negotiator opposed the proposal.
“Over the last several days, the negotiated rulemaking committee has reviewed and ultimately concluded that the PSLF program should be focused on public service,” said Acting Under Secretary James Bergeron. “While the committee was not able to reach consensus, I'm proud that the committee members representing institutions of higher education, veterans, taxpayers, borrowers, and the business community have helped fulfill one of President Trump’s promises to ensure that PSLF does not subsidize organizations that are breaking the law. The Department thanks the committee members for their dedication and hard work on this critical issue.”
Background:
Section 492 of the Higher Education Act requires that the Secretary of Education solicit public involvement in the development of proposed regulations before publishing a Notice of Proposed Rulemaking (NPRM) implementing programs authorized under Title IV. After obtaining advice and recommendations from the public and stakeholders, the Secretary conducts Negotiated Rulemaking to develop the proposed regulations.
On March 7, 2025, President Trump signed the Restoring Public Service Loan Forgiveness Executive Order, directing the Secretary to propose revisions to the PSLF program and ensure the definition of “public service” excludes organizations that engage in activities that have a substantial illegal purpose. On May 12, 2025, the Department announced its intention to establish the 'Student Loans and Affordability Committee' to prepare proposed regulations for federal student aid programs authorized under Title IV of the Higher Education Act. This action came following two public hearings and a comment period where the Department solicited feedback on ways to streamline and improve higher education regulations.
The draft regulatory language released in advance would amend the PSLF regulations to ensure that the definition of a qualifying employer excludes organizations that engage in activities that have a substantial illegal purpose. The language would revise the definition of a qualified employer, define activities that have a substantial illegal purpose, establish when a qualifying employer has engaged in activities that have a substantial illegal purpose, address the impact on a borrower’s eligibility for cancellation, and give employers notice and ability to respond to the Department’s findings. Illegal activities, including illegal immigration, terrorism, chemical and surgical castration or mutilation of children, child trafficking, illegal discrimination, and a pattern of violating state laws are a threat to our national security and to the social and economic stability of the United States.
The Department has an overriding governmental interest in promoting policies to thwart such unlawful conduct. Following the negotiated rulemaking committee proceedings, the Department will begin drafting an NPRM for publication in the Federal Register for public comment. This week’s session is the first of several negotiated rulemaking proceedings planned by the Trump Administration to reform and streamline regulations on postsecondary education.
For more information on the negotiated rulemaking process, see here.