President Trump signed an executive order on Friday to exclude nonprofits that he says engage in “the subsidization of illegal activities” from the Public Service Loan Forgiveness Program (PSLF).
The executive order states “individuals employed by organizations whose activities have a substantial illegal purpose shall not be eligible for public service loan forgiveness.”
PSLF is a student loan program that lets those in government positions such as police or teachers, along with those working with nonprofits, to receive debt forgiveness after making 10 years of consecutive payments.
“Instead of alleviating worker shortages in necessary occupations, 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 executive order reads.
The order directs the eligibility of the program to be limited for those in nonprofit positions. It also tasks the newly confirmed Education Secretary Linda McMahon with redefining the term “public service” in a way that excludes those that have a “substantial illegal purpose,” including helping violate federal immigration law as well as supporting terrorism and child abuse, among other issues listed in the order.
A Trump staffer said “the problem” with the loan program is that some nonprofit employees work at organizations “that engage in illegal, or what we would consider to be improper activities supporting, for example, illegal immigration or foreign terrorist organizations or otherwise law breaking activities.”
“This executive order will direct your Department of Education and Department of the Treasury to basically bring about modifications to the Public Service Loan Forgiveness Program in order to ensure that people who are engaged in these sorts of activities can’t benefit from a program that’s really not intended to support those sorts of things,” the staffer added.
PSLF began in 2007 under the College Cost Reduction and Access Act. More than one million borrowers have received debt forgiveness through the program.
The changes to PSLF comes as borrowers are not able to access applications for income-driven repayment methods as it has been temporarily taken down by the Department of Education.
It has been a complete 180 for borrowers from the Biden administration, which gave out a record number of student loan forgiveness, including from PSLF.
“The prior administration abused the PSLF Program through a waiver process, using taxpayer funds to pay off loans for employees still years away from the statutorily required number of payments,” Trump’s Friday order reads.
