New PSLF Rules: Public Service Loan Forgiveness Could Be Denied for Employees of Advocacy Groups

The “No Loan Forgiveness for Terrorists Act of 2025” aims to tighten up who qualifies for Public Service Loan Forgiveness (PSLF), the program where student loans are wiped clean after 10 years of working for a qualified non-profit or government agency. If you’re banking on PSLF, this bill introduces several new tripwires that could disqualify your employer—and thus your forgiveness—even if you’re doing essential public service work. The core change is simple: if the organization you work for engages in activities that have a “substantial illegal purpose,” your time there won’t count, regardless of your job title or how much good you’re doing.

The New Exclusion List: Beyond Terrorism

While the bill’s name focuses on terrorism—and it does exclude organizations that materially support Foreign Terrorist Organizations—the scope is much wider, affecting several types of non-profits. For instance, if your employer is found to be materially supporting violations of federal immigration law (like Section 275 of the Immigration and Nationality Act), that’s a disqualifier. This could hit organizations that provide direct legal or material aid to undocumented immigrants, even if their primary mission is, say, providing food or shelter. Your work helping run a food bank, for example, could be disqualified if the organization’s legal aid arm falls under this definition.

When Activism Becomes a Loan Killer

Perhaps the most surprising—and potentially vague—exclusion deals with organizations that engage in a “consistent pattern” of breaking state tort laws. We’re talking about things like trespassing, disorderly conduct, creating a public nuisance, vandalism, or blocking public highways. Think about it: many environmental groups, civil rights organizations, and even local community advocates sometimes engage in peaceful civil disobedience or protests that result in minor charges like trespassing or disorderly conduct. If your non-profit employer has a “consistent pattern” of these activities, your years of service could be wiped out. For a public defender or a social worker relying on PSLF, this adds a layer of risk based on the actions of their organization’s leadership or even other employees.

The Highly Specific Child Abuse Clause

The bill also specifically targets organizations materially supporting child abuse. Crucially, the text defines this category to include highly specific, politically charged issues, such as supporting the chemical or surgical “castration or mutilation” of children, or trafficking children to “transgender sanctuary States” to get emancipation from their parents, all in violation of the law. This inclusion takes a very sensitive, complex social issue and makes it a factor in determining federal student loan eligibility. Given the vagueness of terms like “materially supporting,” this could open up organizations dealing with youth mental health or gender-affirming care to challenges that impact their employees’ loan forgiveness.

Real-World Risk for Public Servants

For the average person working a qualifying public service job—say, a teacher, a nurse at a non-profit hospital, or a city planner—this bill likely won’t affect them unless their employer is engaging in clearly egregious behavior like terrorism. However, for the thousands of people working at advocacy groups, human rights organizations, or environmental non-profits, this bill introduces significant uncertainty. The Department of Education would gain broad, subjective power to interpret what constitutes a “substantial illegal purpose” or a “consistent pattern” of minor violations. If you’re a policy analyst at a civil liberties union that gets involved in a high-profile protest that leads to trespassing arrests, your 10 years toward loan forgiveness could suddenly be on the line, simply because of the organization’s overall activities, not your specific job performance.