Welcome back to the deep dive. If you've ever
felt just, you know, completely overwhelmed trying
to navigate a sprawling government program that
promises these huge rewards, but mostly just
delivers intense frustration, then this deep
dive is for you. It really is. We've cracked
open the files, the GAO reports, the court filings,
and even the latest executive actions, all concerning
the Public Service Loan Forgiveness Program,
or PSLF. And, you know, PSLF started as this
really powerful, almost elegant incentive. The
goal was to funnel talent into these critical,
often underpaid public roles. And we're talking
teaching, nursing, military service. But for
more than a decade, it became the absolute poster
child for systemic bureaucratic failure. So our
mission today is surgical. We are going to provide
you with the essential framework for eligibility,
show you exactly why the program denied, what,
99 % of its first applicants? It's an unbelievable
number. And we'll also analyze how recent and,
frankly, politically charged executive actions
have changed the very definition of what public
service even means going forward. Okay, let's
unpack this. We're really dealing with a government
initiative that was designed to tackle two massive
problems at the same time. The student debt crisis.
And the public service talent gap. Exactly. So
let's set the historical stage. We hear a lot
about PSLF now, but its origins are, well...
They're often forgotten. What's fascinating here,
and I think a lot of people miss this, is that
PSLF is not some recent concept tied to the debt
relief discussions of the last few years. Not
at all. It goes back further. Much further. It
was established way back in 2007 under the College
Cost Reduction and Access Act. And as a really
crucial piece of historical context, that legislation
was signed into law by President George W. Bush.
So this wasn't a contentious single party initiative
at its start? Not in the slightest. It originated
as a bipartisan effort to make sure that someone
who chose to become, say, a teacher in a high
need area or a public defender wasn't forced
out of that career path simply because of massive
student loan payments. So the original core goal
was crystal clear. You commit to 10 years of
public service and in exchange, your remaining
federal student debt gets canceled. It was meant
to be a straightforward, decade long transaction.
A simple tradeoff. Yes. And that simplicity is
so key to understanding the sheer anger and confusion
that followed. Because the formula itself is
so elegant, you fulfill the requirements for
120 months and you're done. Let's just lay out
that simple formula for anyone who is in or maybe
considering public service. These are the three
pillars of PSLF eligibility that you as the listener
have to track constantly. That's right. To achieve
forgiveness, you needed to satisfy three non
-negotiable requirements. And this is critical.
They must be met concurrently. OK, what's number
one? First, you have to make 120 qualifying monthly
payments, not 119, 120. Second. Second, those
payments have to be made under a qualifying repayment
plan, which almost exclusively means one of the
income driven plans. We'll get into why that
is. In the third piece. Third, you absolutely
must be working full time for a qualifying employer
during that entire payment period. All three
have to line up for all 120 months. So the program
began in 2007, which means the clock started
ticking immediately. The earliest possible date
for anyone to get forgiveness would have been
October 1st, 2017. Yes. That date was supposed
to be a celebration, right? A moment of triumph
for that first cohort of public servants. It
was anything but. It was a disaster. That first
milestone quickly exposed the systemic rot that
was right at the heart of the program's execution.
And we have data on this. We do. The Department
of Education's own data confirmed it. As of April
30, 2020, that's three full years after the first
eligibility date, the total number of borrowers
who had actually achieved forgiveness stood at
only 2 ,215. 2 ,215 people. Out of tens of thousands
who had applied and tens of thousands more who
had committed 10 years of their lives to public
service, All based on this promise. And that
low number translates to a denial rate, that
is. Yes. It's almost unbelievable. 98 .5%. We're
just pausing on that. 98 .5%. We have to. You
have to grasp the gravity of that number. We're
talking about thousands of teachers, nurses,
military personnel who structured an entire decade
of their lives, maybe foregoing higher private
sector salaries around a promise that was then
systematically broken. And it wasn't because
they didn't do the work. No. It was because of
technicalities, bad advice from servicers, and
just sheer administrative incompetence. And that
is the foundational tension we are diving into
today. The promise was monumental, but the execution
was, frankly, catastrophic. That denial rate
tells us immediately that the devil isn't just
in the details. The devil is the details. So
we need to transition now and really conduct
a deep analysis of that fine print. Let's start
with the eligibility criterion that trips up
the most people. The qualifying employer. This
is the big one. What is the single most crucial
distinction here? Okay, the core takeaway that
has to override everything else is this. Qualification
is based only on your employer's status, not
your individual job responsibilities. So it doesn't
matter what you actually do all day. Not one
bit. You could be a neurosurgeon or you could
be an administrative assistant. If your employer
qualifies, your employment counts toward those
120 payments. This is where people often confuse
PSLF with other kinds of service -based loan
repayment programs. So if the job description
doesn't matter, what types of organizations meet
that qualification standard? Can you break it
down for us? Sure. The regulations define three
main buckets. The first is the most obvious.
Government organizations or agencies at any level.
Federal, state, local. All of it. Federal, state,
or local. This is the simplest category. Your
public school, your sedate health department,
the U .S. military. If you get a paycheck from
the government, you're almost certainly in. Okay,
what's the second bucket? The second is 501c3
organizations. These are the charitable organizations
as defined by the IRS, and they are a huge, critical
part of this program. And the requirements for
that 501c status are pretty stringent, aren't
they? They are. These organizations have to operate
for what are called exempt purposes. So, charitable,
religious, educational or scientific. The key
phrase often overlooked is that they must not
incur individual benefits or private gain. What
does that mean in practice? Well, it's designed
to exclude certain politically active groups
or organizations that primarily benefit a really
small group of individuals like a family foundation.
It has to be for the public good, broadly speaking.
Beyond that strict 501C definition, you said
there's a... Third bucket for nonprofits. Yes.
The third category is a bit of a catch -all,
but it covers other nonprofit organizations that
provide specific... designated public sizes,
even if they aren't strict 501c3s. What kind
of services? The list includes things like emergency
management, public safety, public health, public
education and public libraries. So it broadens
the scope a little bit. OK, so just to give the
listeners some really actionable examples, we
know public schools and the military count. What
about in the nonprofit sector? What should people
be looking for? Think about the breadth of services
covered there. We're talking about most nonprofit.
private educational institutions, so everything
from major universities to small liberal arts
colleges, they almost always qualify. What about
health care? Absolutely. Nonprofit hospitals,
homeless shelters, community health clinics,
food banks, legal aid societies. These are almost
universally covered. But the key is they have
to maintain that required 501c3 status. This
means the benefit extends way, way beyond just
state and federal employees. This is where it
gets tricky, though. This specific area, the
nuance between direct employment and contract
work, has proven to be one of the most persistent
failure points for borrowers. It's crucial for
anyone working in what you might call a quasi
-public setting. This is where thousands and
I mean thousands of public servants lost their
eligibility. The rule is simple but brutal. you
must be directly employed by the qualifying entity.
Not just working for them. No. If you were a
government contractor, you generally do not qualify
based on your contract with the government alone.
Your employer is the private company that holds
the contract. Can you walk us through a common
scenario where this rule has burned people? Of
course. Think of a state university system, which
is a clear qualifying employer. Now, if that
university hires a private company to manage
its entire IT infrastructure or its security
forces, the person working those jobs is in a
tough spot. Even though they're on campus every
day. Exactly. Even though they're physically
on campus wearing a uniform that might say university
security, they're actually employed by the private
contracting firm. And unless that private firm
itself is also a 501c3 entity, which is rare,
that employment does not count. So it's about
who signs the paycheck. It's all about who signs
the paycheck. The payment source matters, not
the location or the nature of the work. It's
a crucial distinction. And we see this play out
very clearly in highly specialized government
contracts like at the national laboratories.
Absolutely. Many Department of Energy or National
Nuclear Security Administration labs are actually
managed by massive private universities or corporations.
The scientists and engineers working there are
often providing essential mission critical public
service. But their paychecks come from the private
manager. Precisely. Yeah. So if they are employed
by the managing entity, say a huge private university,
that university has to independently qualify
as a 501c3 for the employment to count. But if
the lab is managed by a private for -profit aerospace
or energy company, the employees are immediately
disqualified. Despite serving a core government
function. That's right. And that feels like a
technical barrier that really goes against the
spirit of the law, which was to reward commitment
to the public good. It does. But legally, that
barrier is ironclad under the current statute.
And it leads us to the critical administrative
requirement, the need for the employment certification
form. Yes. You cannot afford to wait 10 years
and just hope you qualified. Why is this certification
form so vital? It is your insurance policy. This
form is what you submit to the Department of
Education's contractor, which is currently MOHELA.
And they use it to determine if your employer
and your employment qualify. And you shouldn't
just do this once. Never. We strongly urge every
listener, particularly those who are new to PSLF,
to submit this form annually Every single time
you change jobs. Why that often? Because if the
servicer rejects your employer, you want to find
out on day 36, not on day 3600. Without that
regular certification, you have no recourse if
10 years down the line, a record is disputed
or a definition changes. It's your paper trail.
That covers the qualifying employer. Now let's
shift our focus to the what? What loan types
actually qualify under PSLF? Because, again,
it turns out not all federal loans are treated
equally. And this is the second great hurdle
that caused that 98 .5 % denial rate. The eligibility
requirement is incredibly narrow. Only loans
made under the William D. Ford Federal Direct
Loan Program are automatically eligible. So what
does that include? That includes your subsidized
and unsubsidized Stafford loans, PLEOL -S loans,
whether they're for parents or for grad students,
and importantly, federal direct consolidation
loans. Now, I know many of our listeners, especially
those who took out loans before, say, 2010, still
hold older forms. of federal debt. I'm thinking
of the FFEL program, federal family education
loan or federal Perkins loans. What's the pathway
for them? The only pathway to eligibility for
FFEL or Perkins loans is consolidation. They
must be consolidated into a direct consolidation
loan. Let me just repeat that. It's not an option.
It is non -optional and non -negotiable. If a
borrower makes 10 years of payments on an FFEL
loan without first consolidating, those 120 payments
are immediately and irrevocably disqualified,
wiped out. And based on the litigation we've
reviewed, this was a major point of confusion.
Loan servicers were actively misleading borrowers
about this consolidation requirement. They absolutely
were. They were telling them that their FFEL
loans were federal and therefore fine. Which
is technically true. They are federal loans.
It is, but they glossed over the distinction
between general federal status and specific direct
loan status. And that single piece of misinformation
disqualified thousands of people who were doing
public service on the assumption their loans
were compliant. And we must also reiterate the
obvious here. What about private loans? Private
student loans, those issued by banks or private
entities like Sallie Mae, are entirely ineligible.
There's no ambiguity. They cannot be discharged
under PSLF and they cannot be consolidated. into
the direct loan program, full stop. So we've
established the qualifying employer and the qualifying
loan type. Now for the 120 payments themselves,
we know they must be monthly and on time. But
critically, they also have to be made under a
specific family of repayment plans. Why are these
plans mandatory? This is the technical distinction
that really defines the cost and the utility
of the entire program. The 120 payments must
be made under one of the income -driven repayment,
or IDR, plans. So that's income contingent repayment.
Yes, ICR, income -based repayment, or IBR, pay
-as -you -earn, which is pay -as -you -earn,
or the revised pay -as -you -earn repay. It has
to be one of those. Why can't a borrower just
choose the standard 10 -year repayment plan?
It seems simpler. Because the standard 10 -year
repayment plan, by its very design, ensures that
your debt is completely zeroed out after exactly
120 payments. Ah, so there's nothing left to
forgive. Exactly. The PSLF program is designed
to forgive the remaining balance after you've
made 120 qualifying payments. If your balance
is zero because you successfully completed the
standard 10 -year plan, There's nothing left
to forgive. So the whole point of the IDR plans
is to lower the payment. Yes. They intentionally
lower your required monthly payment, pegging
it to a percentage of your discretionary income,
which ensures that even after 120 payments, a
substantial, often enormous balance remains to
be forgiven. This means if you start public service
and just stick to the standard 10 -year plan,
thinking you'll get forgiveness at the end, you
are completely missing the entire mechanical
point of the program. You are. You're just paying
off your loan. You have to choose an IDR plan
to maximize the forgiveness benefit. Moreover,
payments made under things like extended or graduated
repayment plans, which stretch payments out but
aren't tied to your income, usually don't count
either. That was another huge trap for early
borrowers. There is one last tantalizing detail
about the forgiveness itself. Unlike some other
federal programs, PSLF currently has no cap on
the amount forgiven. That is a critical incentive,
especially for highly educated, high debt professionals.
If a medical school graduate commits to working
for a nonprofit hospital in a rural area and
they have, say, $400 ,000 in debt. That entire
remaining balance could just. Theoretically,
yes. The entire remaining balance can be wiped
out after 10 years of service. It's a massive
financial benefit. Are there any tax implications?
We should note that while the federal government
does not tax PSLF forgiveness as income, there
are some state -level exceptions. Mississippi
is explicitly mentioned in our source material
as a state that does tax PSLF forgiveness, which
is a key detail for anyone living and working
there. We have spent a good amount of time defining
the rules. And in doing so, I think we've already
uncovered exactly where the failure points lie.
The confusion over loan types and people being
on the wrong repayment plans. That's the core
of it. Let's now move into the period of crisis.
Because the sheer scale of those initial denial
rates, it demanded congressional action. Oh,
it had to. The initial data was truly staggering.
When that first cohort of public servants began
applying for forgiveness, starting in October
2017, the numbers that came back suggested the
system had completely broken down. And what were
those first numbers? Of the first 28 ,000 public
servants who applied, only 96 were approved.
96. 96. That's a 99 % denial rate right out of
the gate. That is a level of administrative failure
that goes way beyond a small oversight. We have
to ask, was this just because borrowers made
mistakes or was the system itself fundamentally
compromised? The evidence strongly suggests systemic
compromise rooted in misinformation. While the
rules were complex, the primary root cause identified
by multiple government watchdogs and later in
court was that the loan servicers, the companies
managing the accounts like the predecessor to
Mohilla, were providing false or misleading information
to borrowers. So people were being told they
were on the right track when they weren't. Constantly.
Servicers frequently told borrowers that they
were on a qualifying repayment plan or that their
older FFEL loans were fine, without ever mentioning
the mandatory step of consolidation into a direct
loan. So we have thousands of people who were
told, you're all set, just keep working, only
to find out a decade later that none of their
payments counted. Exactly. This left Congress
with very little choice but to intervene. What
was their first attempt at a legislative fix?
The first major response came in March 2018.
Congress passed the Temporary Expanded Public
Service Loan Forgiveness Program, or TETPSLF.
Another acronym. Another one. This program was
essentially a targeted patch. It was designed
specifically to catch those public servants who
had satisfied the employment requirement and
made 120 payments, but were denied only because
they had chosen a non -qualifying repayment plan,
like a graduated or extended plan, instead of
an IDR plan. Okay, that sounds like it should
have solved a pretty large chunk of the problem.
Did it work? Tragically, no. The fix itself failed
and failed massively, which just illustrates
the deeper rot in the tracking system. Where
do the numbers say? A government accountability
office or GAO report documented the failure of
54 ,184 public servants who applied for this
TEPI -SLF fix. 53 ,523 were denied. So the fix
had the same denial rate as the original problem?
Pretty much. The mechanism of failure was subtle.
Even though TEPI SLF forgave the repayment plan
error, it still had to rely on the same flawed
servicer accounting that couldn't accurately
track payments or determine compliance in the
first place. So it just led to another colossal
wave of denials. If I'm a public servant who
has now been through a PSLF denial and then a
TEPI SLF denial, I'm left with the distinct feeling
that the government made a promise it had no
intention of keeping. Was there any financial
relief offered at that point? Well, recognizing
they were dealing with a massive failure caused
by government administrators and contractors,
the U .S. Department of Education announced a
second chance plan in May 2018. A fix for the
fix. Essentially, yes. Congress had set aside
$350 million specifically for this purpose, a
kind of fix it fund, to help people seeking reconsideration
who were denied because of the wrong repayment
plan. And how was that money distributed? It
was distributed on a first come first serve.
served basis. And while $350 million sounds like
a lot of money, given the scale of the debt and
the sheer number of denials, it offered only
very limited relief and it ran out quickly. It
was a temporary solution, not a systemic correction.
Now, even as those legislative patches were being
applied, the day -to -day realities of just dealing
with the loan servicers continued to plague applicants.
What specific ongoing issues are borrowers facing
even now, primarily with the current contractor,
Mohele? Ah, the list is long and it's persistent.
We see incredibly long processing delays. Applicants
report waiting three months or more after submitting
certification forms, which is just unacceptable
when the benefit hinges on precise timing. And
it's not just delays. Not at all. Worse, there
are repeated documented instances where servicers
incorrectly inform people they do not qualify
when they actually do. Automated messages containing
wildly inaccurate payment counts are routine.
So the system can't even count correctly? Apparently
not. The Consumer Financial Protection Bureau,
the CFPB, even issued formal warnings to the
previous servicer, FedLoan, over these deceptive
practices, which essentially confirmed the institutional
failure. And even the tool that's designed to
help seems to have his own technology. Yes, the
Department of Education's own PSLF help tool
has been reported to have these technical limitations.
For instance, it sometimes won't allow people
to select that they have successfully made over
120 payments, which is the entire reason they're
using the tool, forcing them to find awkward
workarounds or submit forms with incomplete information.
This is an ironic bureaucratic track. It's the
perfect definition of one. And this whole context
of systemic failure, servicer misinformation
and technical roadblocks is what makes the Biden
administration's corrective action in 2021 such
a watershed moment. This was the temporary waiver.
This was the true game changer that finally addressed
the root causes of all these denials. What did
it do differently? The temporary waiver, which
was announced on October 6th, 2021, was truly
revolutionary because it cut right through the
two primary errors that had been disqualified.
So it was an immediate acknowledgement that the
system Not the borrower was at fault. Precisely.
It forced the Department of Education to look
back at the past decade, strip away all the servicer
errors, and accurately credit those 120 payments
for public servants who had held up their end
of the bargain. This wasn't a small adjustment.
It required a complete overhaul of their payment
accounting systems. And the impact speaks for
itself. What did that single temporary policy
change? actually achieve? It was massive. As
of March 2022, so just five months after the
waiver was announced, 100 ,000 people had their
loans canceled. Wow. Amounting to over $6 .2
billion in student loan forgiveness. This success
rate didn't just validate the complaints of all
those denied borrowers, it reset the foundation
of the program. It demonstrated its genuine,
if previously untapped, potential. That is a
staggering number. $6 .2 billion canceled for
100 ,000 public servants in a matter of months.
However, that figure also gives us pause. The
government estimates that something like 1 .3
million public servants qualify for PSLF. That's
the estimate, yes. So while $6 .2 billion is
immense, does that still feel like just a drop
in the bucket compared to the total population
that's eligible? It highlights the persistent
gap. It shows the incredible power of the waiver,
for sure, but it also confirms that even after
this huge success, there are still hundreds of
thousands, if not a million, public servants
who either don't know they qualify, haven't completed
the necessary steps, or are still just navigating
the bureaucracy. The complexity remains incredibly
high, and the sheer volume of debt still eligible
for cancellation is a massive concern for fiscal
planners. That gap, the promise versus the potential
cost, brings us perfectly to our next section.
Because what's fascinating here is that even
as the government tries to fix the systemic flaws
in PSLF, the program itself has been under constant
attack from a policy perspective. Yes. It has
been politically targeted almost since its inception,
and that's regardless of which party was in power.
The political volatility of PSLF stems directly
from those cost estimates you just mentioned.
Once the scale of potential forgiveness became
clear, especially for professionals with high
debt loads, proposals to curb the program became
very frequent. And it's important to stress one
thing about these proposals. Yes. Nearly all
of them targeted new borrowers only. They acknowledged
that it is nearly impossible, both politically
and legally, to retroactively revoke a promise
that's already been made to current public servants.
OK, let's trace this political pressure. It even
started under the Obama administration, right?
It did. Back in 2015, President Barack Obama's
budget proposed a cap on PSLF. The idea was to
limit the amount of loan forgiveness to $57 ,500
for all new borrowers. This signaled a very early
concern over the long -term fiscal liability
of the program. Especially for those high -debt
borrowers like doctors and lawyers. Exactly.
The ones who had received disproportionately
large amounts of forgiveness. And that concern
was then amplified significantly by Republicans
in the subsequent years. Absolutely. The 2016
Republican budget resolution proposed eliminating
the PSLF program entirely for new student loan
borrowers. And this theme continued very aggressively
under the next administration. President Trump's
budget proposals. Correct. President Donald Trump
proposed eliminating PSLF in his 2018, 2019 and
2021 budget proposals. The consistent rationale
for all of these measures was fiscal responsibility.
And there was also a significant legislative
attempt which showed how serious Congress was
about curbing the benefit. That was the Prosper
Act. It was a Republican proposed bill that would
have eliminated PSLF, again, only for new borrowers
starting July 1st, 2019. This legislation advanced
but was ultimately considered dead after Democrats
regained control of the House of Representatives
in 2019. But the driving force was always the
same. Always. The impetus for all these proposals
remains constant. The finding in a key GAO report
that the cost of loan forgiveness had been severely,
severely underestimated. So anytime there's a
major policy discussion about student debt, PSLF
is placed squarely on the chopping block for
future participants. So we have bureaucratic
errors leading to massive denials, and we have
these continuous legislative threats aimed at
curtailing the program. Now we have to turn to
litigation. Specifically... the American Bar
Association, the ABA case, which reveals this
dangerous precedent of the government changing
the eligibility goalposts mid -game. This case
is a perfect microcosm of the chaos that public
servants were facing. Starting in December 2016,
a really critical issue arose. What happened?
Certain employees who had been told, sometimes
for years, that their jobs were eligible by the
servicers and by the Department of Education
were later told, retroactively, that their employers
no longer qualified. Wait, they were told they
were good and then the government changed its
mind? That's exactly it. The Department of Education
had quietly decided the specific types of employment,
despite being for a qualifying employer like
the ABA, are no longer PSLF eligible. This created
incredible legal jeopardy, didn't it? I mean,
people had committed years to public service
based on official guidance. They had. And so
the ABA and four individual plaintiffs sued the
Department of Education over this retroactive
denial. Their core argument was that the department
had substantially changed its policy on PSLF
eligible employers without following the proper
legal procedure. Which would require public notice.
Yes, which requires statutory public notice and
comment periods. The ABA argued the department
was just refusing to honor commitments that formed
the entire basis of their careers. How did the
federal court in New York react to the Department
of Education's defense? The court's reaction
was devastating to the department. On February
22, 2019, the federal district court found the
Department of Education's actions to be arbitrary
and capricious. And that's a very specific legal
term. It's a highly technical and damaging legal
finding. It means the agency acted without a
rational basis. The court ruled that the department
failed to acknowledge it had changed its previous
guidance, failed to provide a reasoned analysis
for the denial, and, most crucially, failed to
take into account the serious reliance interests
affected by public servants who had structured
a decade of their careers around this specific
benefit. The court actually went so far as to
classify the department's position on eligibility
as nonsense. That's an unusually strong word
choice for a judicial opinion. It speaks volumes
about the court's frustration. It shows the judicial
system saw this administrative confusion as deeply
harmful and just fundamentally unfair to the
plaintiffs. The ruling vacated the department's
denial letters and mandated reconsideration.
And that was a hugely significant ruling. It
was because it laid the critical legal groundwork
for other borrowers who were denied after receiving
faulty governmental guidance to appeal their
cases. So what was the final resolution of this
major litigation? Did the Department of Education
fight it? No. they chose not to appeal the ruling.
They subsequently settled with the ABA, confirming
that all full -time ABA employees are indeed
employed in a public service job for a public
service organization. But there was a catch.
There was. And this is the critical caveat that
defines the next political battle. The Education
Department reserved the right to change the definition
of a public service organization in new regulations
in the future. So they lost the battle but kept
the power for the war. Exactly. They acknowledged
the court's finding of arbitrary action, but
they did not surrender the future power of rulemaking.
And that brings us right up to the most recent
and highly charged regulatory changes in 2025.
This shows us exactly why that department reservation
of future rulemaking power mattered so much.
It allows an administration to use the regulatory
definition of public service as a political tool.
Precisely. We are now talking about actions that
directly leverage the definition of a qualifying
employer to exclude certain organizations based
on the political or social activities they conduct.
On March 7, 2025, President Donald J. Trump issued
Executive Order 14235. And the title was Restoring
Public Service Loan Forgiveness. That was the
title. What was the primary directive of this
executive order regarding PSLF? The order directed
the Secretary of Education to revise PSLF regulations
to specifically exclude organizations engaging
in activities deemed to have a substantial illegal
purpose. The idea was to create a mechanism to
strip PSLF eligibility from nonprofits whose
work was deemed contrary to the administration's
legal or political interpretations. And the executive
order cited several types of activities as potentially
disqualifying, right? It did. The order explicitly
cited activities such as aiding illegal immigration,
terrorism, child trafficking, discrimination
and acts of civil disorder. As soon as the order
was released, a lot of concerns arose regarding
the ambiguous scope of substantial illegal purpose
and the potential for disqualifying widely recognized
legitimate nonprofit sectors. The final rules
implementing this directive were then finalized
in late 2025. What specific areas were cited
in those finalized regulations? And we are reporting
directly on the text of the finalized rules here,
which were specifically aimed at two highly political
areas. Which were? For instance, the regulation
used specific, highly charged terminology referring
to certain medical care for transgender youth
as chemical castration, which is quoted directly
from the executive summary of the rule. And it
also targeted organizations organizations involved
in aiding illegal immigration. So an organization
like a legal aid society that's dedicated to
providing representation for asylum seekers or
a nonprofit hospital that provides medical care
for transgender individuals. They could theoretically
lose their PSLF qualifying status based on these
new regulatory interpretations. That's a dramatic
shift. It's a dramatic shift in the understanding
of what constitutes. public service. It's important
to clarify though that separate from these politically
driven exclusions, the Department of Education
was also working on administrative improvements
aimed at just making the program function better.
That's absolutely right. It wasn't all political
warfare. The DOE -DE convened what are called
negotiated rulemaking sessions in July of 2025
specifically to address all this ongoing administrative
confusion. And what came out of those? These
sessions produced 15 significant consensus -based
revisions. They were all aimed at simplifying
the application and the eligibility tracking
processes for PSLF regulations. And these are
expected to be released. later in 2025, separate
from the finalized political exclusions. So we
see the program simultaneously being streamlined
bureaucratically while being attacked and redefined
politically. It's a perfect summary of the situation.
This has been a whirlwind tour through a program
that's defined by these deep structural contradictions.
A brilliant promise that was ruined by bureaucratic
failure, revived by executive action, and then
immediately subjected to incredible political
volatility. Yeah. As we wrap up this deep dive,
let's just synthesize the primary tension points
we've uncovered. I think the tension is rooted
in the program's history of broken trust. PSLF
is a program of immense promise, a true powerful
incentive for public service. But it was immediately
fraught with historic denial and bureaucratic
confusion, primarily caused by service or error
and governmental complexity around loan types.
Yet the 2021 temporary waiver proved that the
promise could be kept. It proved the program
could work as intended. The fact that $6 .2 billion
was canceled for 100 ,000 people demonstrates
the capacity for large -scale relief when you
remove those bureaucratic hurdles around loan
type and payment plan. But the complexity inherent
in diligent tracking and certification remains
incredibly high. So what's the lesson? The lesson
is that success for anyone pursuing PSLF requires
militant focus. You must obtain direct loans,
you have to select one of the income -driven
repayment plans, and you have to diligently and
regularly certify your employment. You can't
just trust the servicer. You cannot rely on your
servicer's advice. You have to assume you are
responsible for monitoring your own compliance.
But critically, you must do all of this while
operating under the awareness of a constantly
shifting regulatory environment. So what does
this all mean for you, the listener, who might
be considering public service or is maybe currently
working in the field? What's the major takeaway
from that ABA case and the 2025 regulatory changes?
It means that you cannot rely on the of the program
rules, especially the definition of your employer.
The history of PSLF is a history of rule changes,
legislative threats and governmental reservations
of the right to change the definitions. The political
definition of public service is proving to be
as unstable as the bureaucratic administration
of the loans themselves. That leads perfectly
to our final provocative thought for you to consider
long after this deep dive ends. Given the continuous
legislative efforts dating back to the Obama
administration and consistently advanced by Republicans
to cap PSLF eligibility or eliminate. the amount
of debt forgiven and considering the Department
of Education's demonstrated ability, upheld by
the courts in their settlement with the ABA,
to change the definition of a public service
organization via new regulations. The question
is, what does this ongoing instability and the
political weaponization of the qualifying employer
definition mean for the long -term career planning
and commitment of future public servants? Right.
If the promise of relief, the very foundation
of a decade -long professional commitment, can
be retroactively revoked or just redefined every
few years, does that risk undermining the entire
purpose of PSLF? Does it dissuade highly indebted
graduates from choosing those lower paying, critical
public roles, forcing the government to find
new, likely more costly ways to incentivize service?
It's a question that defines the ongoing debate
over the cost and execution and the very future
of the public service loan forgiveness program.
It's something to keep in mind as you commit
the next decade of your professional life to
serving the public. Thank you for joining us
for this deep dive. We'll see you next time.