Trump signs order to limit who gets public service student loan forgiveness
The president says some nonprofit organizations that qualify for the program are engaging in illegal activity, without offering any proof.
“The PSLF Program has misdirected tax dollars into activist organizations that not only fail to serve the public interest, but actually harm our national security and American values, sometimes through criminal means,” the order says. “The PSLF Program also creates perverse incentives that can increase the cost of tuition, can load students in low-need majors with unsustainable debt, and may push students into organizations that hide under the umbrella of a nonprofit designation and degrade our national interest.”
The order takes aim at nonprofit organizations that it says support gender-transition care for minors, engage in public protests that include blocking highways or fund groups that are designated as foreign terrorist organizations.
As it stands, nonprofit employees are eligible for student loan forgiveness if they focus on areas that serve the public good, such as education, public health or public interest law. According to the Education Department, there are more than 2 million people with eligible employment.
“The president claims to be committed to ‘free speech,’ but we’ve quickly discovered that pledge doesn’t apply to higher education and now, PSLF,” said Randi Weingarten, president of the American Federation of Teachers. “He wants to impose an ideological litmus test antithetical to American values and contrary to the statute at hand. It’s an illegal attack on millions of dedicated public service workers who placed their faith in PSLF’s bipartisan promise, only to see it ripped away.”
The order may not take immediate effect. Education Secretary Linda McMahon may need to convene a panel of experts for a negotiated rulemaking to change the criteria for qualifying employers and then invite the public to comment on any proposed revision. The definition of a qualifying employer is both in statute and regulation, said Jessica Ranucci, an attorney at the New York Legal Assistance Group who has previously served as a negotiator for the department.
Trump’s order runs counter to McMahon’s pledge to Congress during her confirmation hearing, where she said that she would uphold the loan forgiveness program. In an exchange with Sen. Tim Kaine (D-Virginia), McMahon said she would not let interference from Trump or the U.S. DOGE Service prevent her from implementing the program as Congress directed.
Congress created Public Service Loan Forgiveness in 2007, during President George W. Bush’s administration, to entice college graduates to enter fields such as teaching and social work that served the public good but were not as lucrative as private sector jobs. To qualify, people must make 120 on-time monthly payments for 10 years to have the remaining balance canceled. They must work for the government or certain nonprofits; they must have loans made directly by the federal government; and they must be enrolled in specific repayment plans, primarily those that cap monthly loan payments to a percentage of their income.
The rules of the program are complex. People have complained of receiving bad advice from loan servicing companies hired by the Education Department, leading them to believe they were making qualifying payments when they were not. The volume of complaints was enough for Congress to create a temporary fix in 2018 so payments made in the wrong plan could be credited toward forgiveness.
When that program failed to get results, the Biden administration implemented a year-long waiver of the rules that aided in more than 1 million borrowers receiving $78.5 billion in student loan forgiveness.
Trump alleges that Biden’s waiver process misused taxpayer funds to forgive loans for people who were still years away from the required number of payments.
Conservatives have derided the program as a backdoor subsidy for graduate school, and a handout for doctors and lawyers who have the earning potential to repay their student loans. Eliminating Public Service Loan Forgiveness is a tenet of Project 2025, the blueprint for a second Trump term spearheaded by the conservative Heritage Foundation. In his first term, Trump had proposed ending the program, as have House Republicans.
Still, the forgiveness program enjoys a fair amount of bipartisan support because it is a critical benefit that states and local governments use to attract talent, including public defense attorneys, health-care workers and police officers.
About Post Author
