Donald Trump links student loan relief to transgender and immigration agenda in new rule

US President Donald Trump's administration is planning to exclude some nonprofits from a popular student loan forgiveness program to prevent direct or indirect facilitation of “illegal activity”. Organizations that support terrorism, illegal immigration, and transgender issues will cease to benefit from the Public Service Loan Forgiveness (PSLF) program, the US Education Department announced.

Donald Trump to stop PSLF for non-profits

The US Education Department declared that the Trump administration has decided to cancel the PSLF program for “organizations that engage in unlawful activities” like “supporting terrorism and aiding and abetting illegal immigration”.

As per a press release by the federal agency, the move will “restore the taxpayer-funded PSLF program to its intended purpose of benefitting Americans working in public service.”

“Taxpayer funds should never directly or indirectly subsidize illegal activity,” said Nicholas Kent, the under secretary of Education. The PSLF program is not meant for organizations that support illegal immigration and transgender rights, Kent emphasized in the press release.

Although the move aims to prohibit illegal immigration, the Education Department has assured that nonprofits that advocate for immigrants or represent them in court will not have to give up their eligibility for PSLF, as reported by Reuters.

The PSLF program is a student debt cancellation initiative for Americans who devote themselves to nonprofit work, among other qualified roles. As per the outlet, nearly 43 million Americans currently have federal student loan debt. The requirement will go into effect on 1 July 2026.

Mike Pierce on the latest PSLF rule

In March this year, Mike Pierce, co-founder and executive director of Protect Borrowers, argued that the Trump administration mainly wanted to use PSLF to penalize organizations it did not like, as per CNBC. “This is about more than PSLF or ED policy. Anyone covering it from that angle is missing the plot,” he wrote on X, formerly Twitter.

“Donald Trump is weaponizing debt to police speech that does not toe the MAGA party line,” Pierce added. He said democracy was “on fire.”

FAQs

When will the final rule for the PSLF program take effect?

The final rule for the PSLF program will take effect on 1 July 2026.

Which organizations are being barred from the PSLF program?

Organizations that support terrorism, illegal immigration, and transgender issues are being barred from the PSLF program.

What is the PSLF program?

The PSLF program is a student debt cancellation initiative for Americans who devote themselves to nonprofit work.