If you work in public service and have student loans, the passage of the One Big Beautiful Bill may be one of the most important policy changes you'll ever encounter. Whether you're a teacher, nurse, social worker, nonprofit employee, or even a contractor supporting a public mission, the new law significantly expands access to Public Service Loan Forgiveness (PSLF) and changes how student loan repayment works in the U.S.
In a recent video, LoanSense CEO Catalina breaks down exactly what changed, what it means for public servants, and what actions you should take right now. This post walks you through the highlights from that video and explains how to make sure you don’t miss out on thousands in loan forgiveness.
Let’s start with the core updates. The One Big Beautiful Bill codifies and expands several student loan provisions first introduced under the Biden administration, particularly those related to the SAVE plan and PSLF. One of the most impactful updates is that PSLF eligibility has been broadened to include many borrowers who were previously excluded—specifically those working under contracts for nonprofit or government-funded entities. That means if you work in healthcare, education, or mental health, and your employer is a contractor supporting a nonprofit or government mission—even if it's not technically a 501(c)(3)—you may now qualify for PSLF.
This expansion is a big win for professionals in health care systems, mental health providers, adjunct faculty, and others working in mission-driven roles. It reflects the reality that much of today's public service work is done by contractors, not just traditional nonprofit employees. Now, those contributions can count toward loan forgiveness.
Another important update is how the federal government will calculate PSLF credit going forward. Historically, borrowers were required to submit employment certification forms every year to have their time counted toward forgiveness. With the new law, that process will become automated through what’s called auto-crediting. The Department of Education will match IRS and employer data to automatically track qualifying payments and employment. While this automation promises to reduce paperwork and make forgiveness more accessible, it’s not live yet. That’s why Catalina strongly recommends that borrowers continue submitting their PSLF forms until the auto-crediting system is fully implemented. Relying on automation prematurely could result in missed credits and delays.
There are also new rules clarifying what counts as full-time work for PSLF. Borrowers who work multiple part-time jobs—such as gig workers, per diem healthcare professionals, or adjunct professors—can now combine hours across employers to meet the 30-hour-per-week minimum required for forgiveness. This change makes the program more inclusive and responsive to today’s workforce realities.
Beyond PSLF, the bill also includes provisions that help all federal loan borrowers—not just public servants. Most notably, borrowers with balances under $12,000 can now receive forgiveness after just 10 years of repayment, instead of the typical 20 to 25 years. This change appears to apply broadly and could benefit millions of borrowers with lower balances, especially those who attended community college or shorter certificate programs.
Another piece of good news is that one of the most popular features of the SAVE plan—the rule that prevents unpaid interest from growing your loan balance—is now enshrined in law. Even if the SAVE plan itself faces legal hurdles, this key benefit will remain intact under the newly established Repayment Assistance Program. That means if your income-based payment is lower than the interest on your loan, the remaining interest won’t be added to your principal—a massive win for long-term borrowers trying to stay afloat.
Now, let’s talk strategy. If you’re currently in SAVE and still in pause, there’s no need to panic or switch plans immediately. The law allows borrowers until July 30, 2026, to transition into qualifying plans and still be eligible for benefits. Catalina’s guidance is to stay put if SAVE is still working in your favor, especially since paused time may now count toward forgiveness. However, for high-income borrowers nearing the end of their repayment period, switching to an Income-Based Repayment (IBR) plan might make more sense. IBR caps your monthly payment based on income and offers a shorter timeline to forgiveness than the new Repayment Assistance Program, which requires 30 years of payments in some cases.
For public servants, the best thing you can do now is to submit your PSLF employment certification form to ensure all your past and current work is being counted. The auto-crediting process may not be fully operational for months—or even years—and the last thing you want is to miss out on forgiveness because of a technical delay.
Finally, even if you’ve never considered yourself eligible for forgiveness before, it’s worth checking again. This law opens the door for many borrowers who were left out under previous rules. Whether you’ve worked in a hospital system, a school district, a community-based nonprofit, or through a government-funded contractor, the landscape has shifted—and your student loan strategy should shift with it.
The clock is already ticking. Although the enrollment window runs through 2026, waiting too long to act could result in missed credits and longer repayment timelines. The safest path is to stay informed, update your paperwork, and let experts like LoanSense help you navigate the changes.
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