Student loan cancellation program could become Trump retribution tool, some advocates fear
The Education Department is preparing an overhaul of the Public Service Loan Forgiveness program that would strip the benefit from organizations involved in 'illegal activities" and allow the U.S. education secretary to decide which should lose eligibility. A draft proposal released by the department includes definitions of illegal activity that center on immigration, terrorism and transgender issues.
Several advocates invited to weigh in on the draft proposal raised concerns it would give the department subjective authority to decide if an organization is engaged in anything illegal — a power that could be used to remove entire hospital systems or state governments from the program.
'That's definitely an indicator for me that this is politically motivated and perhaps will be used as a tool for political punishment,' said Betsy Mayotte, president of the Institute of Student Loan Advisors and one of the advocates asked to review the policy as part of a rulemaking process.
Plan could block many from loan relief
More than 1 million Americans have had loans canceled through the program, including teachers, nurses, firefighters and others.
Congress created the program in 2007 to encourage college graduates to work in the public sector. It promises to cancel all remaining debt after borrowers make 120 monthly loan payments while working for any level of government. Currently, nonprofits also are eligible if they focus on certain areas including public interest law, public health or education.
A federal database of eligible employers currently includes some that provide grants to transgender youth and their families so they can travel to states that permit gender-affirming care for minors. It also includes some that provide legal services to immigrants regardless of their legal status.
Trump ordered changes to the program in March, declaring it had 'misdirected tax dollars into activist organizations' that harm national security. He directed the Education Department to remove organizations tied to illegal activities, singling out those that work with immigrants or transgender youth or those that support terrorism — a label he often applies to pro-Palestinian activists.
His plan has the potential to block huge numbers of student loan borrowers from cancellation. Those who work for an ineligible employer would no longer be able to make progress toward cancellation, effectively forcing them to find a new job or forgo loan relief.
Hospitals, schools, and nonprofits could be at risk
The proposal's definitions of illegal activity largely mirror those laid out by Trump. They include 'aiding or abetting" in the violation of federal immigration law, and supporting any group designated as a foreign terrorist organization. Also on the list are violations of the Civil Rights Act of 1964, a law Trump officials have invoked to root out diversity, equity and inclusion policies.
Also considered illegal is 'engaging in the chemical and surgical castration or mutilation of children in violation of Federal or State law.' It says that includes the use of hormone therapy or drugs that delay puberty. It defines children as those under 19.
It raises concerns that entire hospital systems could become ineligible if a single department provides certain care to transgender youth. Likewise, the federal government could potentially strip the benefit from entire cities that limit cooperation with federal immigration officials.
'I could see entire cities and entire civil structures being targeted," said Alyssa Dobson, financial aid director at Slippery Rock University and a member of the rulemaking panel. It could also give the administration another tool in its campaign against universities that run afoul of the president's politics, she said.
'This unfortunately may allow them to further chase the undesirable institutions, in their view,' she said.
When determining if an employer should be deemed ineligible, the department's proposal would take into account court judgments and other legal findings. But it leaves room for at least some degree of subjectivity, giving the education secretary the authority to exclude organizations without proof of a conviction or settlement.
Advocates see ambiguity in the definition of illegal activity
If used widely, the policy could worsen shortages of doctors and nurses, said Emeka Oguh, CEO of PeopleJoy, a company that helps employers provide student loan relief. A member of the panel, he encouraged the department to use the power surgically, going after individual hospital divisions rather than systems as a whole.
Oguh said department officials were unable to provide examples of organizations that might be found to be involved in illegal activities. When pressed for detail, officials said it would not be considered illegal for a hospital to treat an immigrant in the country illegally, he said. Less certain was how the department would handle teachers or schools teaching lessons considered DEI.
'There was a lot of ambiguity there,' Oguh said.
Some others raised concerns with a provision that requires employers to certify they do not engage in illegal activities. Failure to certify could also render an organization ineligible, raising the risk that paperwork problems could jeopardize cancellation for huge numbers of borrowers.
The department said it's open to making changes based on the panel's concerns. Ultimately, it's free to shape the proposal as it pleases. The agency is now preparing a formal proposal that will undergo a public comment period before it's finalized. It would be expected to take effect in July 2026.
Last week, the Education Department thanked the experts and said they 'helped fulfill one of President Trump's promises to ensure that PSLF does not subsidize organizations that are breaking the law.'
___
The Associated Press' education coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find AP's standards for working with philanthropies, a list of supporters and funded coverage areas at AP.org.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Independent
5 minutes ago
- The Independent
Trump's NASA chief Sean Duffy expedites timeline for nuclear reactor on the moon
President Donald Trump's NASA chief Sean Duffy has expedited the timeline to build a nuclear reactor on the moon, according to a directive obtained by The Independent . The space agency has already mentioned the benefits of developing fission surface power (FSP) on the moon and Mars. 'Relatively small and lightweight, fission systems are powerful and could enable robust operations on the Moon and Mars,' NASA writes on its website. The agency says it's currently working with the Energy Department and the space industry to design a fission power system that would provide at least 40 kilowatts of power. In a directive sent to the heads of NASA on July 31, Duffy, the acting administrator of the agency and Trump's transportation secretary, ordered that the nuclear reactor provide at least 100 kilowatts of power and be ready to launch by 2030. NASA chief Sean Duffy has expedited the timeline to build a nuclear reactor on the moon, according to a new directive () The directive, first reported on by Politico, mentioned China and Russia's joint effort to place a reactor on the moon by the mid-2030s. The two U.S. adversaries first announced their plans in March 2024. 'The first country to do so could potentially declare a keep-out zone which would significantly inhibit the United States from establishing a planned Artemis presence if not there first,' Duffy warned in the directive. NASA's Artemis campaign aims to establish the first long-term presence on the moon. During Trump's inaugural address, he said the U.S. would launch astronauts 'to plant the stars and stripes on the planet Mars.' 'It is about winning the second space race,' a NASA senior official told Politico. An artist's concept of a fission power system on the moon (NASA) In Duffy's new timeline, a Fission Surface Power Program Executive will be designated within 30 days of the directive. The executive 'is empowered to provide reporting and updates with maximum transparency directly to the Administrator,' Duffy wrote. Within 60 days, NASA will ask for industry proposals for the nuclear reactor, according to the directive. The directive mentioned Trump's budget request for the 2026 fiscal year, which includes $350 million for a new program 'that will accelerate the development of high priority technologies for Mars, (i.e. FSP).' The funding would increase up to $500 million starting in the 2027 fiscal year. Trump's budget request also proposes a huge cut to NASA, with The Planetary Society, a global non-profit space organization, reporting it's the smallest budget proposed for the agency since 1961.
Daily Mail
6 minutes ago
- Daily Mail
Controversial statue toppled during Black Lives Matter protest to be reinstalled under Trump
A statue of a Confederate general that was toppled and burned in Washington D.C. during the Black Lives Matter protests of 2020 will be reinstalled under President Donald Trump. The National Park Service announced on Monday that its crews are working to restore and reinstall the bronze sculpture of Confederate Brigadier General Albert Pike that once stood in the nation's capital. It was the only statue depicting a Confederate leader in Washington DC until demonstrators used ropes to pull down the structure outside of the Metropolitan Police Department Headquarters. They then doused the figure in lighter fluid and set it ablaze on live television. President Trump - then in his first-term - immediately called for the statue to be put back up, but it has remained in storage ever since. Officials now hope to get the statue back up by October, as they shared a photo of a worker removing corrosion and paint from the site. 'Site preparation to repair the statue's damaged masonry plinth will begin shortly, with crews repairing broken stone, mortar joints and mounting elements,' the National Park Service said. It added that the move to reinstall the statue is in accordance with executive orders Trump signed to beautify Washington DC and restore 'truth and sanity to American history.' Under the order, Trump directed Secretary of the Interior Doug Burgum to determine whether statues have been removed since the Black Lives Matter protests of 2020 to 'perpetuate a false reconstruction of American history, inappropriately minimize the value of certain historical events or figures, or include any other improper partisan ideology.' The Pike statue has long been a source of contention in Washington DC. It was originally dedicated in 1901 at the behest of the Freemasons, who successfully lobbied Congress to grant them land for the statue they said would honor Pike's 32 years as Sovereign Grand Commander of the Ancient Rite of Scottish Freemasonry. Congress agreed to give the Masons the land so long as Pike would be depicted in civilian, and not military clothing. The DC City Council called for its removal for the first time in 1992, and Delegate to the House of Representatives Eleanor Holmes Norton has introduced multiple bills in Congress to get it removed in the decades that followed, NBC Washington reports. One such resolution referred to Pike as a 'chief founder of the post Civil War Ku Klux Klan,' a claim the Masons strongly deny. But Pike did lead a regimen of Native Americans in Arkansas who sided with the Confederacy and were accused of scalping Union troops in an 1862 battle. He eventually received a pardon from President Andrew Johnson for his wartime actions and went on to become a prominent member of the Freemasons. During the riots in 2020, protesters spray painted the statue, decrying Pike as a 'racist' and sharing their support for the Black Lives Matter movement. It was one of many such Confederate statues toppled that summer, which Trump decried in his first term. 'Very sad to see States allowing roving gangs of wise guys, anarchists & looters, many of them having no idea what they are doing, indiscriminately ripping down our statues and monuments to the past,' he tweeted at the time. 'Some are great works of art, but all represent our History & Heritage, both the good and the bad. 'It is important for us to understand and remember, even in turbulent and difficult times, and learn from them. Knowledge comes from the most unusual of places!' The president also hit out at police for 'not doing their job as they watch a statue be ripped down & burn[ed]' after it was reported that officers did not respond to the scene until approximately an hour after the crowds gathered - despite police headquarters being mere feet away, WUSA reports. By then, the statue had already been toppled and torched, with officers left only able to extinguish the flames. In the years since, Delegate Holmes Norton has lobbied for the statue to be placed in a museum. 'I've long believed Confederate statues should be placed in museums as historical artifacts, not remain in locations that imply honor,' she told WUSA on Monday. 'President Trump's longstanding determination to honor Confederate General Albert Pike by restoring and reinstalling the Pike statue is as indefensible as it is morally objectionable,' she continued. She went onto claim that Pike 'served dishonorably' and noted that he 'took up arms against the United States, misappropriated funds and was ultimately imprisoned by his fellow own troops. He resigned in disgrace after committing a war crime and dishonoring even his own Confederate military service.' Holmes Norton then announced that she will take action to prevent the statue from going back up. 'Given the NPS announcement today that it will restore and reinstall the statue, I plan to reintroduce my bill, which would permanently remove the statue of Pike and authorize the Secretary of the Interior to donate the statue to a museum or a similar entity,' she said. 'A statue honoring a racist and a traitor has no place on the streets of DC,' she declared.
The Guardian
12 minutes ago
- The Guardian
Trump news at a glance: political battle in Texas escalates and president under fire for firing labor statistics chief
Texas governor Greg Abbott on Monday ordered the department of public safety to arrest and return any House member who had left the state and 'abandoned their duty to Texans', as Democrats thwarted plans to redistrict the state along lines that would favour Republicans. 'There are consequences for dereliction of duty,' Abbott said in a statement on Monday, after the Republican-dominated House issued civil arrest warrants in an attempt to compel the return of the members who fled the state in order to deny the legislature a quorom. 'This order will remain in effect until all missing Democrat House members are accounted for and brought to the Texas Capitol.' Democrats hold 62 of the 150 seats in the legislature's lower chamber, so as long as at least 51 members remain out of Austin, the Texas legislature cannot move forward with any votes, including a plan to redraw the state's congressional maps to give Republicans five more seats in Congress. Here are the key US politics stories of the day: Texas Democrats in the state legislature denied its speaker a legislative quorum Monday by leaving the state, forestalling plans proposed by the White House to redistrict Texas's congressional lines to more greatly favor Republicans. Texas governor Greg Abbott has threatened arrest, fines, felony charges of bribery and expulsion against the lawmakers. Read the full story The former Bureau of Labor Statistics (BLS) commissioners and non-partisan economic groups have criticized Donald Trump's shock firing of BLS commissioner Erika McEntarfer after the July jobs report data revealed jobs growth stalled this summer. Read the full story About 600 former Israeli security officials, including previous heads of the Mossad and the military, have urged Donald Trump to pressure Israel to end the war in Gaza as the country's prime minister, Benjamin Netanyahu, considers expanding the conflict. In an open letter, the former officials said an end to the war was the only way to save hostages still held by Hamas. Read the full story Mike Johnson became the highest ranked US official to visit the occupied West Bank on Monday, the Republican House speaker drawing measures of praise and condemnation for his trip in support of Israeli settlements amid a worsening starvation crisis in Gaza. Read the full story More than 40 people protesting the war in Gaza and worsening humanitarian crisis were arrested outside the Trump International hotel in New York City on Monday evening. Read the full story Donald Trump's special envoy is expected in Moscow days before the US president's deadline on Friday for Russia to make progress on ending the war in Ukraine or face increased US sanctions. Trump said Steve Witkoff would visit Moscow on Wednesday or Thursday. When asked what message Witkoff would take to Russia and what Vladimir Putin could do to avoid new sanctions, the US president answered: 'Yeah, get a deal where people stop getting killed.' Read the full story The US state department has prepared plans to impose bonds as high as $15,000 for some tourism and business visas, according to a draft of a temporary final rule. The bonds would be issued to visitors from countries with significant overstay rates, under a 12-month pilot program. Read the full story The Trump administration is seeking to block veterans from receiving abortions at hospitals run by the Department of Veterans Affairs in cases of rape or incest, or when a veteran's pregnancy has imperiled their health, according to new paperwork filed by the administration. Read the full story The Swiss stock market has plunged, the cabinet has held crisis talks and the country's president has been accused of mishandling a vital phone call with the White House after Donald Trump hit the country with a shock 39% export tariff. News Corp, part of the Murdoch family media empire, has announced it will bring a version of the brash rightwing New York tabloid to California in early 2026. Marjorie Taylor Greene said that she feels the Republican party has lost touch with its base – but she said she has no plans to leave the party. More than a dozen Democratic members of Congress signed on to a letter that urges the Trump administration to recognise Palestinian statehood, in a draft copy shared with the Guardian. Catching up? Here's what happened on 3 August 2025.
