Trump's student loan forgiveness overhaul may block immigrants, transgender support groups & more — here's what's changing

Time of India

2 days ago

Who decides what's 'illegal'?
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Trump is changing student loan forgiveness rules. He wants to stop giving loan forgiveness to some groups and organizations. The rule targets immigrant and transgender support groups. These groups might lose access to student loan help if the government says they're involved in 'illegal activities', claims reports.The Education Department wrote a draft plan for the change. It would let the Secretary of Education decide which groups are doing something 'illegal.' The draft focuses on 3 big things: immigration, terrorism, and transgender issues, as per the report by Associated Press.These are the main areas the government is watching to decide what counts as 'illegal.' Advocates are worried this gives too much power to the government. Betsy Mayotte from the Institute of Student Loan Advisors said it might be used for 'political punishment', as per the reports.Over 1 million Americans have already had loans canceled under this program. These include teachers, nurses, firefighters, and more. The Public Service Loan Forgiveness (PSLF) program started in 2007, according to the report by Associated Press.It forgives the rest of your student debt if you work 10 years in public service and make 120 payments. Right now, nonprofits that work in education, law, or health also qualify. This includes groups that help transgender youth or immigrants, as per the reports.Trump said in March the program supports 'activist organizations' that harm national security. He ordered changes to remove groups he says break the law, especially those that support immigrants or transgender youth, according to the report by Associated PressHis plan could force many people to leave their jobs or lose loan forgiveness. If your job becomes 'ineligible,' your loan progress stops. Big groups like hospitals, schools, and nonprofits could all be affected, as per reports.Even if just one department in a hospital helps transgender kids, the whole hospital might become ineligible. The draft says 'illegal activities' include things like helping undocumented immigrants or giving hormone therapy to minors, as stated by Associated Press.Even if these are legal in some states, they could still be called illegal under this plan. This means even cities or states that don't work closely with immigration officials could be targeted.Alyssa Dobson from Slippery Rock University warned that 'entire cities' could lose access. The plan gives the Education Secretary final say, even without a court case. There doesn't need to be a legal conviction — just a decision from the department, as mentioned in the report by Associated Press.Experts said this could cause doctor and nurse shortages. Emeka Oguh from PeopleJoy said the rule might hurt hospitals and clinics if used too broadly. Some experts asked the department for clear examples, but got vague answers. For example, it's unclear how schools teaching diversity (DEI) lessons will be judged, as stated in the reports.There's also a new rule where employers must 'certify' they don't break laws. If they mess up the paperwork, employees could lose loan relief. The Department said they are open to making changes. But they still have the power to shape the final rule however they want, according to the report by Associated Press.The final rule will go through public comments and should be ready by July 2026. This means people can speak up before it becomes official. Last week, the Department said they are keeping Trump's promise. They said they're working to make sure the program doesn't help lawbreaking organizations, as per the reports.Groups that help immigrants or transgender youth could lose access if labeled as doing 'illegal activities' by the Education Department.The new rules are expected to take effect in July 2026, after public comments are reviewed.