Trump Threatens to End Student Loan Relief for Workers at Progressive Nonprofits

President Donald Trump has mandated changes to the Public Service Loan Forgiveness (PSLF) program, which would make employees of certain nonprofits ineligible for loan forgiveness — his latest attack on organizations that challenge his far right agenda.

The PSLF program was originally designed to encourage people to go into public service careers by offering student loan forgiveness after 10 years of qualifying employment, including roles in teaching, government, and nonprofit work. According to December data from the Department of Education, more than 2 million Americans hold student loans and meet PSLF’s employment requirements. However, Trump’s executive order directs the Department of Education and the Treasury Department to propose regulatory changes that would redefine “public service.”

Trump’s order claims that “the PSLF Program … may push students into organizations that hide under the umbrella of a non-profit designation and degrade our national interest.” While existing regulations qualify nonprofits engaged in areas such as public interest law, public health, and education, Trump’s order appears to specifically target organizations that oppose his political agenda, which he claims have a “substantial illegal purpose.”

According to the order, organizations that have a “substantial illegal purpose” include nonprofits that aid undocumented immigrants; promote diversity and equity pipelines; or help trans youth access gender-affirming care or travel to transgender safe haven states. The order also references nonprofits that assist political protesters accused of offenses like “trespassing, disorderly conduct, public nuisance, vandalism, and obstruction of highways.”

“[T]he 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 states.

Critics argue that these changes are blatantly unconstitutional. “Threatening to punish hardworking Americans for their employers’ perceived political views is about as flagrant a violation of the First Amendment as you can imagine,” said Aaron Ament, president of the National Student Legal Defense Network.

Tahir Duckett, executive director of the Georgetown Law Center for Innovations in Community Safety, warned that the move was part of a broader attack on free speech.

“There is a real, genuine First Amendment crisis in the United States right now,” Duckett said on Bluesky. “The government is openly retaliating against anyone with a viewpoint it doesn’t like: Pro-Palestinian protesters, law schools teaching Black history, pro-immigration public service loan forgiveness seekers.”

Mike Pierce, executive director of the Student Borrower Protection Center (SBPC), condemned the executive order as “blatantly illegal and an all-out weaponization of debt intended to silence speech that does not align with President Trump’s MAGA agenda.” He warned that the policy “will have a chilling effect on our public service workforce [and] will raise costs for working people while doing nothing to make America safer or healthier.”

Despite Trump’s directive, regulatory changes to Title IV programs, including PSLF, typically require a negotiated rulemaking process. However, the Secretary of Education can bypass this process if deemed “impracticable, unnecessary, or contrary to the public interest,” according to the National Association of Student Financial Aid Administrators (NASFAA).

This executive order is likely to face legal challenges. “This shockingly petty and evil plan will likely be struck down as unlawful,” Aaron Reichlin-Melnick, senior fellow at the American Immigration Council, said on Bluesky.

According to Just Security, more than 100 lawsuits have been filed against Trump administration actions since January.

“If the Trump Administration follows through on this threat, they can plan to see us in court,” Ament said in a statement.