AAUW: New PSLF Rule Raises Alarming Risks for Equity and Public Service

WASHINGTON, DC – The American Association of University Women (AAUW), a leading advocate for equity in education and women’s economic security, has significant concerns about a new U.S. Department of Education regulation that changes how nonprofit employers qualify for Public Service Loan Forgiveness (PSLF).

The rule grants the Department broad discretion to determine whether a nonprofit employer qualifies for PSLF, based on whether it deems an organization’s work to have a “substantial illegal purpose.” This could open the door to disqualifying organizations that provide services such as legal aid, immigrant support, gender-based violence response, and programs for women and girls.

In formal comments to the Department, AAUW cautioned that this approach could narrow access to PSLF for people serving their communities in good faith, and that the impact would fall heaviest on women and communities of color, who are disproportionately represented in public-interest and nonprofit roles that are often lower paid and carry higher student debt burdens.

Statement from Gloria L. Blackwell, AAUW CEO

Public Service Loan Forgiveness is not just a repayment program — it is a lifeline that helps teachers, social workers, advocates, and other public-serving professionals stay in the work their communities rely on. PSLF helps make those careers possible.

Let’s be clear: this rule is not about protecting taxpayers. It creates a new and subjective test for which nonprofits ‘deserve’ relief, and that invites the federal government to pick winners and losers in public service. We are deeply concerned that this discretion could be used to intimidate nonprofits and silence lawful advocacy by threatening their employees’ access to loan forgiveness.

This is part of a broader pattern. We have seen this Department use federal leverage to pressure colleges and universities to roll back diversity, equity, and inclusion efforts, limit speech on campus, and even restrict which students are welcome — including international students. AAUW has already opposed those efforts as political litmus tests that attempt to condition federal support on abandoning inclusion and academic freedom.