Comment Letter on Proposed PSLF Rule

Re: Proposed Rulemaking, Public Service Loan Forgiveness, Docket ID ED-2025-OPE-00165

Secretary McMahon,

Thank you for the opportunity to provide comments on the proposed rule Docket ID ED-2025-OPE-00165. On behalf of the Public Service Loan Forgiveness (PSLF) Coalition, we write to express our strong opposition to the proposed rule and urge the Department to withdraw it. As explained in greater detail below, the Secretary does not have the statutory authority to make the proposed changes. Moreover, if implemented, this rule would have profound negative implications for public service workers and the communities they serve across this country.

The PSLF Coalition is made up of over 120 U.S.-based organizations representing community-based nonprofit, state, and local government public service professionals. PSLF is a critical investment in our nation’s public service workforce. By ensuring student loan relief for those who commit their careers to serving our communities, PSLF strengthens America’s schools, hospitals, law enforcement agencies, and military. Our communities are stronger because of PSLF.

From teachers and nurses to firefighters, veterinarians and military service members, PSLF ensures that essential workers can remain in their roles, strengthening the health, safety, and fabric of the communities they serve. Without PSLF, many public servants—especially those in rural and underserved areas—would be forced to abandon their careers of choice for the private sector, where salaries are often higher, reducing the workforce that provides vital services across the nation.

PSLF was signed into law by President George W. Bush with the intent of assisting communities in filling critical needs and encouraging college graduates to pursue careers focused on the common welfare. These careers often necessitate moving to areas of the country that are more economically depressed or in rural communities and pay lower wages than the private sector. In order to incentivize public service, Congress and the President created a contract—a deal that was made between public service workers and the government to commit to 10 years (or more) of service while making 120 on-time loan repayments in exchange for forgiveness of the balance of their federal loans at the end of those 10 years. For these public service workers to continue improving our communities, we need to invest in them and fulfill a promise made.

As explained more fully below, the PSLF Coalition strongly opposes this proposed rule Docket ID ED-2025-OPE-00165 because it exceeds the Department of Education’s authority and will result in communities across the nation losing services upon which they depend.

1. The proposed rule exceeds the Department’s authority.

President Trump issued an executive order in March asking the Secretary of Education to revise the definition of “public service” in 34 C.F.R. 685.219 to ensure that it excludes organizations that “engage in activities that have a substantial illegal purpose.” The resulting proposed rule would remove eligibility from employers that the Department deems to have engaged in illegal activities, thus limiting access to PSLF beyond the plain language of the statute.

The Higher Education Act (20 U.S.C. § 1087e(m)) defines a public service job in part, as: “…government (excluding time served as a member of Congress)…or at an organization that is described in section 501(c)(3) of title 26 and exempt from taxation under section 501(a) of such title.”1 The statute is clear that most government employers and all 501(c)(3) organizations are eligible employers under PSLF.

In 2009, when the Department drafted 34 CFR § 685.219 defining the term “qualified employer,” they mirrored the underlying statute such that both the statute and the regulation include the same categories of employment:

Government, including military;

Public child or family service agency;

501(c)(3) tax-exempt organization;

A Tribal college or university; and

A nonprofit organization that provides a non-governmental public service.

In this way, they did not expand the PSLF program beyond the plain meaning of the definition of a public service role but rather harmonized it to ensure that the law could be implemented effectively. The proposed regulation exceeds the Secretary’s authority because it reaches categories of behavior not contemplated by the underlying statute. It is Congress, not the Department of Education, who has the power and authority to make laws and thus changes to eligibility criteria. The Department of Education lacks the legal authority to override the plain meaning of the statute as passed by Congress.

Further, the proposed rule would empower the Secretary with judicial authority to decertify and ban employer participation in the program for at least 10 years through a variety of extra-judicial measures. Again, there is nothing in the underlying statute granting the Secretary this authority nor does it give the Secretary the authority to write and enforce criminal law. Congress is the proper place to write criminal law. Law enforcement agencies, vested with that power by Congress, enforce the law. The courts determine whether or not the law passes constitutional muster. Any violation of law is already reserved for the appropriate state or federal law enforcement agency. In this case, the Higher Education Act grants no such authority to the Secretary. The IRS, for example, already has established a process to revoke nonprofit organizations of their tax-exempt status, and thus eligibility for PSLF, in the event an employer is found to be engaged in illegal activity. The procedure set forth in the proposed regulation would circumvent the existing IRS processes which is a clear violation of existing law.

Without justifying any of the proposed elements of the regulation, their ambiguity will create confusion among public service workers and employers. For example, the use of tax employer identification numbers (EIN) to determine whether an employer is engaging in illegal activities will result in a chaotic implementation of such rules, thus sowing confusion and ultimate delays for hard-working borrowers. If one part of an eligible employer, such as a not-for-profit health system is accused of wrongdoing, the entire institution could lose PSLF eligibility—regardless of whether it engaged in any illegal activities. To make matters worse, the Department has outlined that if employers simply do not check a box on the certification form saying they did not engage in substantial illegal activity, it will count as an affirmation that they did and they will be automatically removed from the list of qualifying employers. This provision threatens to cause immense and immediate penalties to an already vague and confusing process for what could be an innocent oversight.

2. The proposed rule negatively impacts communities in need of public services.

Most importantly for the communities across this country that depend on PSLF, the proposed rule would have far-reaching and harmful consequences. It would make it significantly more difficult for dedicated public servants to deliver essential services in communities nationwide.

Many PSLF-eligible organizations provide services such as disaster relief, substance abuse treatment, or community violence prevention—where requesting immigration or criminal status undermines trust and adds another layer of bureaucracy, directly impeding their ability to provide services to all recipients, including those with legal status. By imposing such barriers, the rule would discourage participation in critical service sectors and weaken the very communities the PSLF program was designed to recruit and retain professionals to support.

The opioid crisis continues to devastate communities across the U.S., claiming over 112,000 lives in 2023 alone, with rural and low-income communities hit the hardest. Frontline mental health professionals, like those working in nonprofit addiction centers, play a critical role in addressing this epidemic by preventing overdoses, supporting recovery, and helping families heal. These providers often rely on the PSLF program to remain in lower-paying, high-need public service roles. Weakening access to PSLF would also weaken the country’s ability to respond to addiction and mental health crises.

PSLF also ensures access to specialized care in fields already facing severe workforce shortages. One PSLF borrower, a neuropsychologist in Norfolk, VA, treats children with developmental disorders, often with wait times of 2-3 months due to a lack of available professionals. Her position took over a year to fill, and further cuts to PSLF would only worsen access to vulnerable families. Similarly, a psychologist in Kansas that serves marginalized communities, supporting early childhood mental health and trauma recovery, relies on the PSLF program to help reduce financial barriers. These professionals were able to choose public service careers because PSLF made it financially feasible. Changes to the PSLF program would not just impact them, it would cause cascading consequences for children, families, and entire communities already struggling access essential healthcare services.

For these reasons, the PSLF Coalition unequivocally opposes this proposed rule in its entirety and urges its withdrawal. We look forward to continuing to collaborate with the Department of Education and are grateful to Secretary McMahon for the opportunity to provide comments.