New Proposal Could Block Student Loan Forgiveness for Millions of Federal Workers

August 18th, 2025
Christina Yang

On Friday, August 15, the Trump Administration proposed new rules that could critically reshape the trajectory of the Public Service Loan Forgiveness program and the lives of over 1 million workers who benefit from it. In March, President Donald Trump initiated changes to the program, stating that it was diverting taxpayer money to “activist organizations” that posed a threat to national security. These new rules would deny debt relief to any public worker whose organizations are deemed to have engaged in activities with a “substantial illegal purpose.”

Public Service Loan Forgiveness (PSLF) is a popular program that was first enacted under President George W. Bush in 2007 to encourage borrowers to take lower-paying jobs at government and nonprofit organizations. These are types of jobs that typically require more advanced degrees, such as prosecutors, public defenders, and nurses, but often pay substantially less compared to private-sector jobs. PSLF offers student loan forgiveness to borrowers who make qualifying payments on their federal student debt while working an eligible public service job for at least 10 years.

The proposal defines activities that have a “substantial illegal purpose” as:

Providing gender-affirming care to minors in one of the 27 states where it is banned.
Engaging in or supporting illegal immigration.
Supporting foreign terrorist organizations.

The Education Secretary would have the final say in deciding whether or not to exclude certain organizations from the program. To that end, the Department of Education has stated that it expects fewer than 10 organizations to be affected. However, the impact will not be evenly distributed. Schools, healthcare providers, social workers and legal aid organizations are especially at risk.

Despite this, the Education Secretary’s interpretation of what constitutes “illegal activity” is likely to be very subjective. Even without a legal finding, the secretary could judge whether an organization participated in illegal activity based on a legal standard called the “preponderance of the evidence”, meaning that it is more likely than not that the accusation is true.

Once an organization is barred, its workers' future loan payments would not count towards the cancellation anymore. Employees would have to find work at another eligible organization to keep making progress toward loan forgiveness. The ban would last 10 years, or until a corrective action approved by the Education Secretary is taken.

Critics have blasted this new proposal as an attempt to weaponize the student loan forgiveness system against political opponents. What comes next is still uncertain, with the public having 30 days to weigh in on the proposal before it can be finalized.

Extemp Analysis by: Ty Tan

Question: What will be the impact of Trump’s reshaping of the Public Service Loan Forgiveness program?

AGD: I would do a narrative here—I think the tangible human impact can’t be ignored, thus doing a narrative-driven speech would be best.

Background: For the background, you have to do the heavy lifting in not only explaining what the Public Service Loan Forgiveness program is, but also laying out its current impacts to create the squo change for your points. I would do:

What the Public Service Loan Forgiveness Program is
How it helps people
How Trump’s reshaping could change this

Answer: Substantial negative impact (or some deeper thesis, up to you, maybe like creating malaise or smth)

Delaying Forgiveness
Creating bureaucratic obstacles
Barring future borrowers

Analysis + Concluding Thoughts

For this speech, keep the analysis simple as to not deviate too far from the question. I would focus more on tight impacting and good narratives, with a weaved narrative working well here. Happy extemping!