Is Public Service Loan Forgiveness in Danger?

A flurry of recent court activity has impacted several student loan forgiveness programs, and millions of borrowers are in limbo. While the Public Service Loan Forgiveness (PSLF) program isn’t directly targeted, the ripple effects of these lawsuits could still impact PSLF borrowers. 

The fate of the program may hinge on the outcome of upcoming elections, leaving many uncertain about its future.

Here’s what borrowers should know.

Overview of recent legal challenges to student loan programs

Groups of Republican-led states successfully sued the Biden administration in 2022 to stop President Biden’s first mass debt cancellation plan, which ended with the controversial Supreme Court ruling last summer overturning the program. 

Many of those same states are suing the administration again to stop the (Saving on a Valuable Education (SAVE) Plan — a new income-driven repayment (IDR) program designed to lower payments and halt runaway balance growth. 

Several of these states filed yet another legal challenge to prevent a new mass debt cancellation program, which officials have characterized as a “Plan B,” from going into effect. 

While PSLF is not currently under direct legal threat, the broader legal environment is making PSLF borrowers uneasy. PSLF is a popular student loan forgiveness program that can wipe out a borrower’s federal student debt in as little as 10 years if they work for qualifying nonprofit or government organizations while meeting the program’s other requirements. 

Most experts would agree that PSLF is on firmer legal footing than several other Biden administration student loan relief initiatives.

But that doesn’t mean that PSLF borrowers aren’t feeling the heat of these legal challenges. And PSLF’s future is not necessarily secure. The program’s fate could be decided in the coming months, as millions of Americans head to the polls this fall to vote in the 2024 elections.

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PSLF has seen success under Biden administration

PSLF allows borrowers who commit to nonprofit or government work while meeting all of the program’s other eligibility rules (including having Direct loans and repaying the balances under specific repayment plans, such as IDR) to get loan forgiveness after 120 qualifying monthly payments — the equivalent of 10 years.

From its inception in 2007 through 2020, the program was plagued by low approval rates that never eclipsed the low single-digits. Confusing rules, inadequate oversight, and poor recordkeeping kept many borrowers from receiving the PSLF credit that they would have been entitled to, and, for some, prevented them from qualifying for student loan forgiveness.

However, the Biden administration implemented a number of reforms to try to improve and streamline the program. These included:

• Temporary “waivers” of PSLF rules to allow past rejected payments and non-qualifying loan periods to be counted.
• Lasting regulatory updates that removed some pitfalls and codified certain elements of the waiver initiatives. 

As a result, nearly a million borrowers have received student loan forgiveness under PSLF since President Biden took office — far outpacing the total number of approvals from 2007 to 2020. 

Related: Public Service Loan Forgiveness: PSLF Statistics

PSLF borrowers currently facing hurdles to student loan forgiveness

A Republican-led legal challenge to block the new SAVE plan resulted in a nationwide injunction last month, halting implementation of SAVE. Borrowers currently enrolled in SAVE are being placed into a forbearance, meaning:

• No payments are due during the forbearance, but the period won’t count toward student loan forgiveness.
• No interest will accrue on loan balances. 

In addition, the injunction — which the Biden administration has slammed as “vastly overbroad” — appears to block any student loan forgiveness for borrowers who happen to be enrolled in the SAVE plan. That could include loan forgiveness under other programs, like PSLF, even though PSLF itself is not blocked. 

It’s unclear how long the injunction will last, but it could be months as the litigation continues and likely returns to the Supreme Court.

Given that many borrowers on track for PSLF had also enrolled in the SAVE plan, all of this means that untold numbers of PSLF borrowers are adversely impacted by the SAVE plan forbearance, despite the fact that PSLF is not facing a court challenge. 

Many borrowers cannot progress toward loan forgiveness under PSLF and cannot receive a discharge at this time due to the ongoing injunction. 

Updated Education Department Guidance offers options

In updated guidance, the Education Department indicated that borrowers pursuing PSLF have some options, albeit rather imperfect ones.

Switch to another IDR plan, such as Income-Based Repayment (IBR)

However, practically, switching to another IDR plan is not possible in the near term as the department has temporarily taken down the online IDR application, and there is a pause on all IDR processing while officials update the department’s internal systems. 

Switch to the 10-year Standard plan

Borrowers could, alternatively, apply to switch to the 10-year Standard plan, but this may not be financially or legally possible for many borrowers. 

Wait for the PSLF Buyback program

Finally, borrowers can later apply to “buy back” the time spent in forbearance through a new PSLF Buyback program that was part of the Biden administration’s PSLF regulatory updates. Still, borrowers can’t request a PSLF buyback until they’ve reached 120 months of qualifying employment, making this option a nonstarter for those fairly early on in their PSLF progress.

Student loan forgiveness under a different Biden program also blocked

PSLF borrowers could have had another shot at loan forgiveness through a new program the Biden administration intended to launch this fall. 

The “Plan B” initiative would provide several pathways to debt relief, such as for those who:

• Have experienced runaway interest.
• Were in repayment for 20 or 25 years
• Qualify for other loan forgiveness programs (like PSLF) but did not apply or enroll.

However, a federal judge blocked this program, as well, following an emergency petition filed by a similar group of Republican-led states. Further proceedings are scheduled in the coming weeks, but the situation does not look promising for this new loan forgiveness initiative. 

PSLF remains intact, but fate of loan forgiveness may depend on election outcome

The Biden administration is facing legal challenges over SAVE and mass debt relief. This is largely because the Education Department drafted regulations establishing these programs, relying on provisions of the Higher Education Act that, they argue, give officials rather broad authority to design IDR plans and compromise student debt. 

The Republican-led challengers contend that the administration exceeded its authority provided by Congress in the Higher Education Act. Lawmakers did not expressly authorize the initiatives the administration is trying to implement, say the states — although Biden administration attorneys and borrower advocates argue that these programs are squarely within the parameters of what Congress envisioned.

Related: What Will Happen with Student Loans if Biden Wins the 2024 Election

PSLF is different, however. Unlike SAVE and mass debt relief, there is no dispute that Congress explicitly authorized student loan forgiveness for qualifying public service borrowers through legislation passed in 2007. 

As a result, PSLF is on much stronger legal footing than SAVE and certain other programs that were established through regulations. No credible legal challenge has been filed to try to overturn PSLF.

How elections could impact the program's future

But elections have consequences, and the outcome of the upcoming race for Congress and the White House could determine the fate of PSLF.

First, it’s important to note that a president cannot simply overturn PSLF. Congress passed legislation, and a president cannot simply void a statute passed by Congress. 

But a future administration could complicate PSLF relief. For example, a future administration could:

• Repeal recently passed PSLF regulations designed to make accessing the program easier for borrowers (such as the new PSLF Buyback program).
• Establish new PSLF regulations to make the program more restrictive. 
• Put up administrative barriers by gutting staffing or funding for administering programs, weakening PSLF and making it harder for borrowers to actually get their loans forgiven.

Related: Kamala Harris’s Student Loan Policies: Everything You Should Know

Can PSLF be repealed?

Only Congress could repeal PSLF, however. This is highly unlikely to happen — unless Republicans manage to win control of the White House, the Senate, and the House of Representatives. 

The last time that happened, which was in 2017-2018 during the Trump administration, no repeal of PSLF ever passed Congress. This time, however, may be different. 

Related: Could the SAVE Plan Survive a Trump Presidency?

Project 2025 — a conservative policy blueprint — explicitly calls for the elimination of profession-based student loan forgiveness programs (which would include PSLF) if Republicans manage to win control of Congress and the presidency. 

“The Public Service Loan Forgiveness program, which prioritizes government and public sector work over private sector employment, should be terminated,” says the proposal in no uncertain terms.

Former President Trump has tried to distance himself from Project 2025, but Vice President Kamala Harris and her campaign reject these efforts as disingenuous. 

Ultimately, for borrowers concerned about the future of PSLF, one thing is clear — the outcome of this election may determine the fate of the program.