{"id":13744,"date":"2025-04-18T16:43:34","date_gmt":"2025-04-18T16:43:34","guid":{"rendered":"https:\/\/finderica.com\/?p=13744"},"modified":"2025-04-18T16:43:34","modified_gmt":"2025-04-18T16:43:34","slug":"trumps-latest-moves-threaten-student-loan-forgiveness-for-more-public-service-borrowers","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=13744","title":{"rendered":"Trump\u2019s Latest Moves Threaten Student Loan Forgiveness For More Public Service Borrowers"},"content":{"rendered":"\n
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US President Donald Trump displays a proclamation in the Oval Office of the White House in … More<\/span> Washington, DC, on April 17, 2025. Trump previously signed an executive order last month to restrict student loan forgiveness under PSLF. (Photo by Brendan SMIALOWSKI \/ AFP) (Photo by BRENDAN SMIALOWSKI\/AFP via Getty Images)<\/span><\/p>\n

<\/fbs-accordion>AFP via Getty Images<\/small><\/figcaption><\/figure>\n

The Trump administration took new steps this week that could jeopardize student loan forgiveness for thousands of Americans based on their public service careers. And this is just the latest in a series of actions that threatens to undermine a bedrock of the federal student loan relief system.<\/p>\n

Public Service Loan Forgiveness, or PSLF, was signed into law in 2007 by President George W. Bush. The program incentivizes borrowers to work in traditionally lower-paying fields in the nonprofit or government sectors. Those who repay their federal student loans while working in qualifying, full-time employment for at least 10 years (while meeting other program criteria) are entitled to receive loan forgiveness for any remaining balance once they have fulfilled their service obligation. Qualifying employers include any tax-exempt 501(c)(3) nonprofit organization, as well as public or government organizations at the federal, state, tribal, or local level. More than a million borrowers have had their student loans discharged under the program to date.<\/p>\n

But President Donals Trump issued new directives last month targeting PSLF. And this week, the administration took additional steps that threaten the program\u2019s future by targeting individual nonprofit institutions. And this may only be the beginning.<\/p>\n

Student Loan Forgiveness Threatened By Removal Of Employer Nonprofit Status<\/h2>\n

This week, President Donald Trump suggested that the IRS should revoke the nonprofit tax-exempt status of Harvard University. The next day, news reports<\/a> indicated that the IRS it taking potential steps to do just that.<\/p>\n

The move followed Harvard\u2019s rejection of conditions proposed by the Trump administration regarding the university\u2019s internal policies for hiring staff, admitting students, creating its curriculum, and handling student activism. Harvard responded by letter to the administration rejecting the proposed conditions, arguing that the efforts to exert control over a private university were unconstitutional and an improper government overreach.<\/p>\n

\u201cThe university will not surrender its independence or relinquish its constitutional rights,\u201d said the university in the letter<\/a> dated April 14. “Neither Harvard nor any other private university can allow itself to be taken over by the federal government. Accordingly, Harvard will not accept the government\u2019s terms as an agreement in principle.<\/p>\n

In response, the President Trump threatened Harvard\u2019s tax-exempt status. \u201cPerhaps Harvard should lose its Tax Exempt Status,\u201d he said on Truth Social the next day.<\/p>\n

Harvard has indicated that there is no legal basis for revoking Harvard\u2019s tax-exempt status. And doing so may be difficult for the administration, say legal experts, as so far there is no clear evidence that Harvard has violated federal law that would warrant the removal of its nonprofit designation.<\/p>\n

But if the Trump administration succeeds in eliminating Harvard\u2019s nonprofit status, employees of the university would no longer qualify for PSLF. The PSLF program requires that student loan borrowers be employed by a qualifying nonprofit or government organization. Harvard employs approximately 19,000 people, not including employees at other Harvard-affiliated organizations, such as several teaching hospitals in Boston.<\/p>\n

Other Nonprofits May Be Targeted, Threatening Student Loan Forgiveness Under PSLF For More Borrowers<\/h2>\n

The Trump administration\u2019s actions threatening to revoke the nonprofit status of a major educational institution may only be the opening salvo in what could be a broader assault on nonprofit organizations. Some observers have suggested that Harvard may just be a test case, and that the Trump administration will soon expand its targets to include other nonprofit colleges and universities. That could jeopardize student loan forgiveness eligibility under PSLF for a far broader swath of borrowers.<\/p>\n

\u201cI think they\u2019re going to go after a whole bunch of them,\u201d said Newt Gingrich, the former House GOP leader, in a statement to The Washington Post <\/em>this week.<\/p>\n

And the targets may not just be limited to colleges and universities. On Thursday, President Trump threatened Citizens for Responsibility and Ethics in Washington, also known as CREW. CREW is a nonprofit legal organization focused on government ethics and accountability. The organization has filed several lawsuits against the Trump administration.<\/p>\n

\u201cThe only charity they had is going after Donald Trump,” the President told reporters on Thursday. \u201cSo we\u2019re looking at that,\u201d he said, referencing the organization\u2019s tax-exempt status. “We\u2019re looking at a lot of things.\u201d<\/p>\n

As with Harvard, revoking the nonprofit status of CREW may be legally fraught. But if successful, it could prevent its employees from qualifying for student loan forgiveness under PSLF.<\/p>\n

\u201cAmericans\u2019 most cherished freedom is that we have a right to say what we believe without fear of governmental persecution,\u201d said Public Citizen co-presidents Lisa Gilbert and Robert Weissman, in a statement to Politico<\/a>. \u201cPresident Trump\u2019s comments threatening the charitable status of CREW because of the views the organization has expressed is a direct assault on that most cherished of freedoms.\u201d<\/p>\n

Revoking Nonprofit Status Is Part Of Broader Effort To Restrict Student Loan Forgiveness Under PSLF<\/h2>\n

President Trump\u2019s actions this week come just one month after he issued an executive order to limit student loan forgiveness eligibility under PSLF for organizations that engage in \u201cillegal activities.\u201d<\/p>\n

\u201cThe 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,\u201d Trump said in the order. He directed the Department of Education to draft new rules and regulations implementing these restrictions. The department initiated the rulemaking process earlier this month.<\/p>\n

The President\u2019s order says PSLF eligibility should be restricted for organizations that facilitate activities such as \u201cillegal immigration, human smuggling, child trafficking, pervasive damage to public property, and disruption of the public order.\u201d But the statute governing PSLF does not allow either the president or the Department of Education to restrict student loan forgiveness eligibility for otherwise-qualifying organizations. And student loan borrower advocates have suggested that the directives in the order are so vague and broad that it could bar organizations from participating in PSLF on a massive scale \u2013 such as state governments that have DEI initiatives, or hospital systems that provide gender-affirming care. Some legal experts and borrower groups have argued that these restrictions would be unconstitutional, as they would punish institutions based on their viewpoint or associations.<\/p>\n

\u201cThis executive order is a political attack on nonprofits with 501c3 status that support or engage in activities falling within the administration\u2019s flawed and intentionally vague definition of \u2018illegal,\u2019\u201d said Kristin McGuire, Executive Director of Young Invincibles in a statement in March. \u201cThis deliberately unclear and expansive definition creates an ambiguous catch-all, targeting advocacy organizations whose work doesn\u2019t align with the Trump administration\u2019s ideological agenda.\u201d<\/p>\n

Separately, Republican lawmakers in Congress are also considering revoking the nonprofit status of hospitals as part of an effort to offset the costs of massive tax cuts through a budget reconciliation bill. Doing so could jeopardize the student loan forgiveness eligibility under PSLF for nearly five million healthcare workers. GOP leaders are currently working on drafting legislative text for the reconciliation bill.<\/p>\n<\/div>\n

Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

US President Donald Trump displays a proclamation in the Oval Office of the White House in … More Washington, DC, on April 17, 2025. Trump previously signed an executive order last month to restrict student loan forgiveness under PSLF. (Photo by Brendan SMIALOWSKI \/ AFP) (Photo by BRENDAN SMIALOWSKI\/AFP via Getty Images) AFP via Getty<\/p>\n","protected":false},"author":1,"featured_media":13745,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rank_math_lock_modified_date":false,"footnotes":""},"categories":[196],"tags":[378,541,286,240,72,650,1336,308,2536,962],"class_list":{"0":"post-13744","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-finance-news","8":"tag-borrowers","9":"tag-forgiveness","10":"tag-latest","11":"tag-loan","12":"tag-moves","13":"tag-public","14":"tag-service","15":"tag-student","16":"tag-threaten","17":"tag-trumps"},"_links":{"self":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/13744","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=13744"}],"version-history":[{"count":0,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/13744\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/media\/13745"}],"wp:attachment":[{"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=13744"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=13744"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=13744"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}