Trump administration order denies student loan relief to nonprofit workers engaged in ‘improper’ activity

US President Donald Trump has announced significant changes to the

Public Service Loan Forgiveness program

, a move that could impact thousands of borrowers. Since returning to office, Trump has taken a hard stance on various policies, including education, immigration, and loan forgiveness, signaling a shift in federal priorities.
In the latest development, the administration signed an executive order last Friday, directing the

Department of Education

to modify the Loan Forgiveness program. The changes would disqualify workers at nonprofit organizations engaged in activities deemed “improper” by the government. According to the Associated Press, loan relief will be denied to individuals whose work is linked to illegal immigration, foreign terrorist groups, or other unlawful activities.

Impact on Borrowers and the Legal Battle Ahead

Data from the Department of Education shows that more than 2 million Americans are employed in eligible public service roles while holding student loans. Under current guidelines, nonprofits qualify for Loan Forgiveness program if they focus on areas such as public interest law, public health, or education. However, the

Trump administration

’s new restrictions appear to target specific professions and organizations that do not align with its political agenda, particularly those working in immigration-related fields.

Education Secretary Linda McMahon has pledged to uphold the Loan Forgiveness program as mandated by Congress, reports Associated Press. However, the administration’s new directive is expected to face legal challenges. In the past, advocacy groups have taken the federal government to court over PSLF restrictions, arguing that denying loan forgiveness based on an employer’s perceived political stance violates constitutional rights.
“Threatening to punish hardworking Americans for their employers’ perceived political views is about as flagrant a violation of the First Amendment as you can imagine,” said Aaron Ament, president of the National Student Legal Defense Network, in a statement to the Associated Press.

A Program in Political Crossfire

The Loan Forgiveness program has long been a political battleground. Under President Joe Biden, the Department of Education expanded eligibility, loosening restrictions through federal rulemaking. In its final weeks, the Biden administration granted loan forgiveness to over 1 million borrowers, a dramatic increase from just 7,000 cancellations during Trump’s first term.
With Trump now back in office, the Department of Education has once again tightened the Loan Forgiveness program rules, rolling back previous expansions. As the new restrictions take effect, borrowers, legal experts, and advocacy groups are preparing for a legal and political fight over the future of student debt relief in America.