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Time of India
5 days ago
- Politics
- Time of India
Student Loan Forgiveness programs to undergo massive changes under Trump 2.0. Are you at risk?
President Donald Trump is going to make a significant transformation of the Public Service Loan Forgiveness (PSLF) program. The proposed changes arrive based on concerns that federal funds have been used to support organizations that the administration views as acting outside the law. This has sparked fear that it will become a tool for political retribution, taking aim at organizations that serve immigrants and transgender youth. What is Public Service Loan Forgiveness program? Established in 2007, PSLF allows government employees, such as teachers and firefighters, plus many who work for nonprofits, to have their student loans canceled after they've made payments for 10 years. Government employees, healthcare workers, nonprofit staffers, and public defenders have all relied on PSLF and more than one million borrowers have already benefited from or are working toward forgiveness under it. Congress established the program in 2007 to motivate college graduates to pursue careers in the public sector, where pay is typically lower than in private industry. Under the program, borrowers who make 120 qualifying monthly payments while employed by any level of government are eligible to have their remaining student loan debt forgiven. Nonprofit employees can also qualify—provided their work focuses on areas such as public interest law, public health, or education. What are the proposed changes? Live Events The proposed changes from the White House, if implemented, would allow the Education Department to remove loan forgiveness eligibility from organizations it determines have engaged in "illegal activities." The overhaul in the policy would strip the benefit from organizations involved in 'illegal activities,' with the final determination left up to the US education secretary. A draft proposal released by the department includes definitions of illegal activity that center on immigration, terrorism and transgender issues. Definitions within the draft rules, including those related to immigration, terrorism, and transgender issues, have prompted concerns from advocates and education professionals about the potential for subjective or politically motivated enforcement. The draft proposal by the Education Department gives the secretary the power to determine which organizations have engaged in "illegal activities" and should be disqualified from PSLF. The proposal's focus includes organizations that allegedly aid federal immigration law violations, support foreign terrorist organizations, or contravene anti-discrimination statutes. 'That's definitely an indicator for me that this is politically motivated and perhaps will be used as a tool for political punishment,' 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, told AP. The ED convened a 10-person advisory panel to draft regulatory language for the PSLF overhaul. Who are at risk? If the proposed changes come into place, hospitals, schools and nonprofit organisations 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 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. Entire hospital systems could become ineligible if a single department provides certain care to transgender youth. Cities with sanctuary policies or public schools promoting diversity and inclusion programs could be flagged under the new rules. Workers who have spent years working toward loan forgiveness may abruptly lose eligibility. Organizations would also be required to certify each year that they are not participating in any prohibited activities. Some borrowers fear they may now be forced out of PSLF eligibility due to their employers' activities. "For those currently enrolled in PSLF, now is the time to stay informed and connect with the entity overseeing your participation," Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek. "While not all organizations will be affected, some could, and you don't want to be caught in a situation where the rules for forgiveness change, and you're unsure if you and your employer still qualify." Borrowers are unable to monitor progress toward forgiveness, and significant delays have emerged in updating PSLF statuses. While the PSLF tracker on remains online, updating remains inconsistent, further contributing to borrower uncertainty, according to Forbes. The Department of Education is currently preparing the final rule for public comment. If adopted, the changes would take effect in July 2026.
Mint
5 days ago
- Politics
- Mint
Trump's student loan cancellation overhaul: Why hospitals, schools and non-profit organisations are at risk
US President Donald Trump is planning to reshape a student loan cancellation programme that experts say may become a tool for political retribution, aimed at organisations that serve immigrants and transgender youth. According to an AP report, the loan cancellation programme, Public Service Loan Forgiveness, allows government employees, such as teachers and firefighters, plus many who work for nonprofits, to have their student loans cancelled after they've made payments for 10 years. An overhaul of this programme, which the Education Department is reportedly working on, could strip the benefit from organisations involved in 'illegal activities'. A draft proposal released by the department includes definitions of illegal activity that centre on immigration, terrorism and transgender issues, the report said. Several advocates invited to weigh in on the draft proposal raised concerns it would give the department subjective authority to decide if an organisation is engaged in anything illegal — a power that could be used to remove entire hospital systems or state governments from the programme, AP report said. '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. According to the report, over 1 million Americans have had loans cancelled through the programme, including nurses, college staffers, and park rangers. Started in 2007 by the Congress, the programme aimed to encourage college graduates to work in the public sector, where salaries are often lower than at for-profit companies. The programme 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, the report added. President Trump had ordered changes in the programme in March, declaring it had 'misdirected tax dollars into activist organisations' that harm national security. Trump directed the Education Department to remove organisations 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. A federal database of eligible nonprofits 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, an AP report said. The planned overhaul could potentially 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 forgiveness. Needless to say, hospitals, schools, and nonprofits could be at the risk of being blocked if the overhaul of the loan forgiveness programme goes through, the report added. The proposal classifies 'illegal activities' as 'aiding or abetting' and supporting any group designated as a foreign terrorist organisation as 'in the violation of federal immigration law'. 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. 'Engaging in the chemical and surgical castration or mutilation of children" is considered illegal and "in violation of Federal or State law.' The proposal says this includes the use of hormone therapy or drugs that delay puberty, and defines children as those under the age of 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, as AP reported. '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.
6 days ago
- Politics
Student loan cancellation program could become Trump retribution tool
WASHINGTON -- President Donald Trump is reshaping a student loan cancellation program into what some fear will become a tool for political retribution, taking aim at organizations that serve immigrants and transgender youth. Public Service Loan Forgiveness allows government employees, such as teachers and firefighters, plus many who work for nonprofits, to have their student loans canceled after they've made payments for 10 years. The Education Department is preparing an overhaul that would strip the benefit from organizations involved in 'illegal activities," with the final determination left up to the U.S. education secretary. 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. More than 1 million Americans have had loans canceled through the program, including nurses, college staffers and park rangers. Congress created the program in 2007 to encourage college graduates to work in the public sector, where salaries are often lower than at for-profit companies. The program 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 nonprofits 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 forgiveness. 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. Only one negotiator opposed the proposal, the Education Department noted. Several negotiators on the rulemaking panel said they took issue with the proposal, but voted in favor of tweaks they felt improved the rule. An Education Department spokesperson said the agency 'has an obligation to prevent unlawful conduct and ensure that employers in the PSLF program are not complicit in illegal activities.' 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 Education 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.'
Boston Globe
6 days ago
- Politics
- Boston Globe
Trump is reshaping a student loan forgiveness program. Some fear politics will decide who qualifies.
Get Starting Point A guide through the most important stories of the morning, delivered Monday through Friday. Enter Email Sign Up '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. Advertisement More than Congress created the program in 2007 to encourage college graduates to work in the public sector, where salaries are often lower than at for-profit companies. The program 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. Advertisement A federal database of eligible nonprofits includes some that provide grants to transgender youth and their families so they can travel to states that Trump 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 forgiveness. 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 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. Advertisement 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 'This unfortunately may allow them to further chase the undesirable institutions, in their view,' she said. When determining whether 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. Only one negotiator opposed the proposal, the Education Department noted. Several negotiators on the rulemaking panel said they took issue with the proposal, but voted in favor of tweaks they felt improved the rule. An Education Department spokesperson said the agency 'has an obligation to prevent unlawful conduct and ensure that employers in the PSLF program are not complicit in illegal activities.' If used widely, the policy could worsen shortages of doctors and nurses, said Emeka Oguh, chief executive of PeopleJoy, a company that helps employers provide student loan relief. A member of the panel, he encouraged the Education Department to use the power surgically, going after individual hospital divisions rather than systems as a whole. Advertisement 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.'
Economic Times
6 days ago
- Politics
- Economic Times
Trump's student loan forgiveness overhaul may block immigrants, transgender support groups & more — here's what's changing
Donald Trump plans changes to student loan forgiveness. Some groups may lose access if the Education Department labels them as engaging in 'illegal activities'. The focus is on immigration, terrorism, and transgender issues. Advocates worry about political punishment. The changes could affect hospitals, schools, and nonprofits. The new rules are expected by July 2026, after public comments. Tired of too many ads? Remove Ads Who decides what's 'illegal'? Millions already got help from this program Tired of too many ads? Remove Ads Trump says some groups are harmful Government didn't give clear answers Tired of too many ads? Remove Ads FAQs 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 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 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 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 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 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 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 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 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 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 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 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 that help immigrants or transgender youth could lose access if labeled as doing 'illegal activities' by the Education new rules are expected to take effect in July 2026, after public comments are reviewed.
