Nonprofit leader: Reinstate public service loan forgiveness
One year into the second Trump administration, the federal policy landscape has shifted dramatically — impacting communities and the nonprofit organizations that support them. In the churn of daily developments, it’s easy to overlook changes that don’t make front-page news but nevertheless carry enormous consequences. One of those quiet but far-reaching shifts involves the federal Public Service Loan Forgiveness (PSLF) program.
In Massachusetts and across the country, hundreds of thousands of teachers, first responders, social workers, military personnel, and nonprofit staff members have built their careers around the simple promise that after serving their communities for 10 years, their student loan debt will be forgiven. For many, the PSLF program is the only way to make a career in public service financially feasible. Now that promise is at risk.
The U.S. Department of Education issued a final rule that will unlawfully exclude certain nonprofit employers if it determines their work has a “substantial illegal purpose.” While this language may sound reasonable on paper, in practice, it would open the door to politically motivated, ideology-driven decisions that undermine the certainty public servants were promised.
Under the current PSLF program, all employees of 501(c)(3) nonprofits qualify for student-loan forgiveness after 10 years of public service. The rules are simple, fair and clear. They reflect a bipartisan understanding that America depends on the nonprofit sector to deliver essential services in every community, from food security to workforce development to youth mentoring. As private-sector jobs typically pay more than government or nonprofit jobs, the PSLF program is an important incentive to recruit and retain top talent in the social sector. The rule will upend that clarity, giving the federal government broad discretion to decide which missions are acceptable and which are not.
If implemented, the changes will have a chilling effect across the nonprofit sector. Nonprofit staff members could lose eligibility for loan forgiveness overnight. It will make it harder for organizations to recruit and retain employees already struggling with student loan debt. And it could unfairly target nonprofits that serve marginalized communities, such as immigrant organizations, LGBTQ+ centers, or racial-justice advocates, simply because their work challenges the political beliefs of the current administration.
Every day, nonprofit workers open shelter doors before dawn, mentor students after school, and sit beside patients in hospitals late into the night. When a family loses their home, it’s often a local nonprofit that finds them housing. When disaster strikes, nonprofits are among the first to mobilize, filling gaps that government systems can’t reach. During the pandemic, they kept food pantries stocked, delivered meals to seniors, and helped parents navigate remote learning. These organizations thrive on trust, compassion, and commitment. At a time when nonprofits are already facing persistent funding volatility and underinvestment in infrastructure and staff capacity, undermining the stability of this workforce through changes to PSLF would do more than harm dedicated employees; it would weaken the fabric of care and community they’ve built, leaving millions of Americans without the services they depend on most.
To put the stakes in perspective: in 2022, the nonprofit sector accounted for about 12.8 million jobs nationally — nearly 10% of private-sector employment in the U.S. In Massachusetts, nonprofits are an even more significant part of the economy, accounting for more than 550,000 jobs, employing over 17% of the state’s workforce, and generating billions of dollars in economic activity each year, according to the Massachusetts Nonprofit Network. Overall, this rule threatens to slash the nonprofit sector’s capacity to deliver essential services and meet local needs.
The organization I work for, TSNE, works with hundreds of nonprofit organizations across Massachusetts and nationally. We know what happens when political ideology seeps into public service: Nonprofits can’t plan for or sustain programs amid shifting rules. Employees lose faith that their years of service will be honored, and their financial sustainability is compromised. And the people we serve — the students, families and neighbors relying on nonprofit programs — pay the price.
Public service loan forgiveness is a promise made to those who dedicate their careers to serving others and to the communities that depend on their work. Weakening that promise risks driving talent out of the nonprofit sector and destabilizing the services that millions of Americans rely on every day. The Department of Education should reverse this new rule and preserve PSLF as intended: a fair, reliable path to forgiveness for all nonprofit employees. When the government keeps its word to public servants, communities are stronger for it.
Gloria Ramón is chief strategy officer at TSNE (Third Sector New England Inc.) in Boston.