Sponsors (3)
This bill narrows PSLF eligibility to bar forgiveness for employees of organizations that engage in defined illegal activities—protecting taxpayers and clarifying enforcement—but risks stripping loan relief from lawful public‑service workers, chilling nonprofit and immigrant‑serving work, and inviting vague or politicized enforcement.
Taxpayers and the federal loan program: stops Public Service Loan Forgiveness (PSLF) from being granted to borrowers employed by organizations that commit serious illegal acts, reducing the chance that taxpayers fund forgiveness for employees of criminal or terror‑supporting groups.
Borrowers and the Department of Education: provides clearer eligibility guidance by explicitly authorizing denial of PSLF for employees of organizations that engage in specified illegal activities, which can make enforcement decisions more administrable.
Students and low‑income public servants: borrowers who work at organizations accused of listed conduct could unexpectedly lose PSLF eligibility even if their job duties are lawful, creating risk of unforeseen loan repayment costs.
Workers at advocacy, civil‑rights, and nonprofit organizations: employees may avoid or leave work involving protest, civil disobedience, or controversial tactics because those employer activities could jeopardize their PSLF eligibility, chilling civic and service work.
Students and state/private employers: broad and partly vague terms (e.g., 'materially supporting' or 'pattern of' violations) could produce inconsistent or politicized enforcement by the Education Department and lead to legal challenges.
Based on analysis of 2 sections of legislative text.
Prevents employment with organizations that engage in listed illegal or harmful activities from counting as qualifying public service for loan forgiveness.
Official title: Amend the public service loan forgiveness program under the Higher Education Act of 1965 to ensure qualifying public service excludes employment with organizations that engage in activities that have a substantial illegal purpose.
Introduced May 21, 2025 by James E. Banks · Last progress May 21, 2025
This bill narrows eligibility for Public Service Loan Forgiveness by excluding as “public service jobs” any employment with organizations that it finds engage in specified illegal or harmful activities. It adds a list of five categories of disqualifying activities — including aiding illegal immigration, materially supporting terrorism or cartels, materially supporting certain child abuse or trafficking claims, patterns of illegal discrimination, and repeated violations of state tort laws — so borrowers working for organizations that engage in those activities could lose eligibility for loan forgiveness. The change operates by amending the statutory definition of “public service job” used in federal student loan forgiveness law; it does not create new loan programs or funding, but it changes which employers count toward loan forgiveness requirements.