TAKE ACTION: COMMENT ON PROPOSED PSLF CHANGES
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On August 18, 2025, the U.S. Department of Education released a Notice of Proposed Rulemaking to change how the Public Service Loan Forgiveness (PSLF) program works. The proposed changes would severely limit which employers qualify, among other restrictions.
The National Council of Nonprofits is urging nonprofits to resist these changes by submitting comments to the Department. The deadline to submit your comments is September 17, 2025.
Here’s what you need to know:
WHAT’S PROPOSED
Under the proposed rules:
Employers engaging in activities deemed to have a “substantial illegal purpose” would no longer count as qualified employers under PSLF.
Examples of what counts as “substantial illegal purpose” include aiding or abetting violations of immigration law, supporting terrorism (including funding), illegal discrimination, trafficking of children, and other serious offenses.
The Department of Education (ED) would have the power to strip an employer’s eligibility based on a “preponderance of evidence,” without a full, adversarial process. Criteria might include frequency/severity of violations, or a court judgment or settlement.
Employers would also be required to certify they are not engaging in disqualifying activities. If they are disqualified, they could potentially regain eligibility after 10 years or using a corrective action plan, subject to ED approval.
WHY THIS MATTERS
Public Service Loan Forgiveness was built to encourage and support public service, especially in nonprofit and government sectors. If employers suddenly become disqualified or are subject to vague standards, it threatens:
The ability of talented people to commit to public-service careers (especially in nonprofits) without fear of losing the support of PSLF.
The financial stability and staff recruitment of nonprofits, particularly those working in underserved communities.
The predictability of the program: people plan based on current rules and promises. Abrupt or retroactive changes can undermine trust, retention, and the promise of PSLF.
WHAT ARE THE CONCERNS
The Council of Nonprofits raises several objections to these changes:
Conflict With Existing Law
Current law specifically ensures that all 501(c)(3) charities are PSLF‑qualified employers. The proposed rule would overstep that statutory guarantee.
Risk of Political or Ideological Bias
Harm to Nonprofits, Workers, and Communities
Employees may lose the opportunity to work in public-service jobs if their employers are later disqualified.
Nonprofits may struggle to recruit and retain staff. The consistency and predictability that many have relied on in PSLF would be undermined.
Due Process Concerns
The standard (“preponderance of evidence”) favors a lower burden than many legal processes.
ED may lack the capacity, expertise, or organizational structure to make these determinations fairly.
Existing Mechanisms Already Address Illegal Conduct
There are legal and regulatory systems (IRS rules, criminal law, etc.) to deal with employers violating laws. This rule duplicates or expands those in ways that may be unnecessary.
WHAT YOU CAN DO
The National Council of Nonprofits guide provides steps and tools for nonprofit organizations, employees of nonprofits, and other stakeholders to submit public comments opposing the rule.
The deadline to submit your comment is September 17, 2025. Comments submitted after that date will not be considered. Submit your deadline by using the online submission system at Regulations.gov, Docket ID ED‑2025‑OPE‑0016‑7221.
Draft your comment using or modifying the templates as your guide.
WHAT TO INCLUDE IN YOUR COMMENTS
Personalize it. Describe your organization, community served, or your own experience.
Be specific about how the proposal would affect you or your organization.
Identify what you agree with or oppose, and propose alternatives or revisions.
Maintain a respectful tone; whatever you submit will be public, so avoid including private or sensitive information.
When you write your comment, consider making these points:
Statutory law currently guarantees that all 501(c)(3) nonprofits are eligible. ED has no authority under current law to add additional exclusion criteria.
The proposed rule opens the door to political or ideological influence over what qualifies as “good standing” under PSLF.
These changes will cause real harm to employees with respect to their job choices, loan repayment plans, and retention of staff.
Due process and fairness concerns: how will decisions be made, what evidence is acceptable, is there an appeals process?
ED may not have the capacity to fairly adjudicate a surge of “illegality” determinations.
If enough people speak up, the Department of Education must consider those opposing views. This is a moment where nonprofits, public servants, and their allies can influence whether PSLF remains strong, predictable, and inclusive.
