PSLF rule changes student loan borrowers should know about

While federal courts have blocked the Trump administration’s efforts to curb eligibility for Public Service Loan Forgiveness, other recent changes still impact borrowers’ ability to benefit from the program.

For example, a new repayment plan doesn’t qualify for PSLF, and many parent borrowers may now be locked out of the program entirely. These shifts are due to President Donald Trump’s One Big Beautiful Bill Act, which overhauled the country’s federal student loan system, and are effective as of July 1.

PSLF, which President George W. Bush signed into law in 2007, allows certain not-for-profit and government employees to have their federal student loans canceled after 120 payments, or 10 years. More than 9 million borrowers may be eligible, according to a 2022 estimate from Protect Borrowers, a nonprofit.

Here are three recent updates to PSLF.

To qualify for PSLF, student loan borrowers need to be enrolled in certain repayment plans.

Any time spent in one of the new plans established by the OBBBA — the Tiered Standard Plan— will not count toward your 120 required PSLF payments, said Scott Buchanan, executive director of the Student Loan Servicing Alliance, a trade group for federal student loan servicers. The Tiered Standard Plan comes with fixed payments, spread over different timelines based on your total debt amount.

For new borrowers, or those who took out loans after July 1, your only repayment option to qualify for PSLF is the new Repayment Assistance Plan. RAP is the U.S. Department of Education’s latest income-driven repayment plan, or IDR, meaning it sets borrowers’ monthly bills at a share of their income. Under RAP, monthly payments typically range from 1% to 10% of your earnings; the more you make, the bigger your required payment.

“For anyone borrowing a new loan on or after July 1, 2026, this is especially important, because the Tiered Standard Plan is the default,” said Rich Williams, a former deputy assistant secretary at the Education Department. “New borrowers who don’t actively pick a plan get placed there automatically, quietly earning zero PSLF credit.”

Existing student loan holders pursuing PSLF will have more repayment plans to choose from, including the Income-Based Repayment plan, or IBR, said Nancy Nierman, assistant director of the Education Debt Consumer Assistance Program in New York, a nonprofit that helps borrowers navigate repayment. As a result, they should compare their monthly bills under the available IDR plans and pick the cheapest option, she said.

If you hope to get your debt scrubbed from PSLF, you should generally ignore the forgiveness term on the IDR plan, Nierman added. For example, RAP concludes in debt cancellation only after 30 years.

But for PSLF borrowers, she said, “it’s a 10-year path to forgiveness regardless of which plan you are enrolled in.”

Many parents who borrow student loans for their children’s higher education no longer qualify for PSLF, due to the OBBBA’s changes. That’s because the law shut out Parent PLUS borrowers from IDR access.

“Parent PLUS loans no longer have a path into income-driven repayment or PSLF,” said Williams.

Parent borrowers who took out loans after July 1 now qualify only for the Tiered Standard Repayment Plan, which doesn’t count toward PSLF.

Meanwhile, existing Parent PLUS loan holders recently had a short window to consolidate their debt and potentially maintain a way to enroll in an IDR plan. Consolidating Parent PLUS loans leaves borrowers with a Direct federal loan — the kind most students carry.

But if you did not do so, you have lost access to IDR plans and therefore the benefit of PSLF, experts say.

Student loan borrowers may no longer need to fret over whether their employer will remain eligible for PSLF. That’s because two federal judges in June struck down the Trump administration’s rule that would have changed the definition of a “qualifying employer” under PSLF to exclude organizations that “engage in unlawful activities.”

Opponents of the policy said the vague language would have allowed the Trump administration to shut out nonprofits that it didn’t like.

“The administration could appeal the decision, but they have not said anything since the rule was struck down,” Nierman said. “And if they did appeal, there’s no guarantee they would win.”

The Education Department recently wrote on its website that it was working to update the PSLF form to comply with the court order, but that “language regarding an employer’s certification that it has not engaged in illegal activities will have no effect.”

The best way to find out if your job qualifies for PSLF is to fill out the so-called employer certification form. It’s best to fill out this form at least once a year and keep records of your confirmed qualifying payments, experts say.