The Trump administration announced sweeping changes Thursday that will exclude employees of organizations that provide support for undocumented immigrants or gender-affirming care for minors from student debt relief, defending the move as excluding “illegal” activities.
The change — which the administration has been working on for months — impacts the U.S. Department of Education’s Public Service Loan Forgiveness program. Created in 2007, the program cancels student debt for full-time “public servants” after 10 years of monthly payments. Teachers, government employees, healthcare workers, law enforcement and some nonprofit employees qualify for the program.
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But now the Trump administration is limiting eligibility and barring employers who participate in what they term “illegal activities” from qualifying, saying the administration “will not direct taxpayer dollars from hardworking Americans to organizations that are breaking the law.”
“The Public Service Loan Forgiveness program was meant to support Americans who dedicate their careers to public service – not to subsidize organizations that violate the law, whether by harboring illegal immigrants or performing prohibited medical procedures that attempt to transition children away from their biological sex,” said Under Secretary of Education Nicholas Kent. “With this new rule, the Trump Administration is refocusing the PSLF program to ensure federal benefits go to our nation’s teachers, first responders and civil servants who tirelessly serve their communities.”
The new rule comes as the Trump administration has made other major changes to federal financial aid and student debt relief. In May, the Department of Education resumed collecting on defaulted federal student loans after a nearly five-year pause that began during the coronavirus pandemic. The GOP’s budget bill walked back some of the more severe proposed changes to student loans but decreased federal student loan amounts and revamped the Biden administration’s student loan repayment plans into one 30-year repayment plan with limited relief and fewer borrower protections.
The changes to the Public Service Loan Forgiveness program are set to go into effect July 1, 2026, targeting employers that have engaged in “illegal” activities, which the Trump administration said includes violating federal immigration laws, supporting terrorism or engaging in violence “for the purpose of obstructing or influencing federal government policy,” providing gender-affirming care to minors, violating state law, “aiding and abetting illegal discrimination” and “trafficking” children to other states for the purpose of “emancipation from their lawful parents.”
Nonprofit organizations and educational institutions across the country have condemned the changes, arguing the move is unconstitutional and a thinly veiled effort to crack down on organizations that refuse to support the Trump administration’s political agenda.
“This is blatantly unconstitutional, illegal and harmful to millions of borrowers across the country, including those working to support historically marginalized communities,” a coalition of more than 250 organizations said in a letter to U.S. Secretary of Education Linda McMahon. “This proposed rule is a clear, unlawful attempt to weaponize the PSLF program in an effort to intimidate and punish governments and (nonprofit) organizations whose work does not fall in line with the Trump Administration’s agenda.”
Dozens of higher education organizations also urged the Trump administration to reconsider the change, which they said would harm millions of borrowers and undermine the very purpose of the program, which is to “ensure a brighter future with less financial burden for public servants.”
A few organizations have threatened lawsuits, including the legal-services nonprofit Democracy Forward, debt-relief advocates Protect Borrowers and the National Student Legal Defense Network.
“This new rule is a craven attempt to usurp the legislature’s authority in an unconstitutional power grab aimed at punishing people with political views different than the administration’s,” Democracy Forward and Protect Borrowers said in a joint statement Thursday. “In our democracy, the president does not have the authority to overrule Congress. That’s why we will soon see the Trump-Vance administration in court.”
