Experts fear Trump to transform the forgiveness of the student loan to be a “tool for political punishment”: “I could see that whole cities are attacked”

The Department of Education is preparing a review of the Public service loans forgiveness Program that would eliminate the benefit of organizations involved in “illegal activities” and allow the United States Secretary of Education to decide which one should lose eligibility. A draft of the proposal published by the Department includes definitions of illegal activity that focus on issues of immigration, terrorism and transgender.

Several defenders invited to evaluate the draft of the proposal raised concerns that would give the department the subjective authority to decide whether an organization is involved in something illegal, a power that could be used to eliminate complete hospital systems or state governments of the program.

“That is definitely an indicator for me that this is politically motivated and may be used as a tool for political punishment,” said Betsy Mayotte, president of the Institute of Student Loans Advisors and one of the defenders requested to review the policy as part of a regulation process.

The plan could block many of loan help

More than 1 million Americans They have canceled loans through the program, including teachers, nurses, firefighters and others.

Congress created the program in 2007 to encourage university graduates to work in the public sector. It promises to cancel the entire remaining debt after the borrowers make 120 monthly loan payments while working for any level of government. Currently, non -profit organizations are also eligible if they focus on certain areas, including the law of public interest, public health or education.

A federal database of elected employers currently includes some who provide subsidies to transgender young allow gender statement Take care of minors. It also includes some that provide legal services to immigrants, regardless of their legal status.

Triumph ordered changes To the program in March, stating that it had “wrong tax dollars in activist organizations” that damage national security. He addressed the Department of Education to eliminate organizations related to illegal activities, highlighting those who work with transgender immigrants or young people or those who support terrorism, a label that often applies to pro-palestinian activists.

Your plan has the potential to block a large number of student loan borrowers. Those who work for a non -eligible employer could no longer move towards cancellation, effectively forcing them to find a new job or give up the relief of loans.

Hospitals, schools and non -profit organizations could be at risk

The definitions of illegal activity of the proposal largely reflect those established by Trump. They include “helping or inciting” the violation of the Federal Immigration Law and supporting any group designated as a foreign terrorist organization. Also in the list are the violations of the Civil Rights Law of 1964, a law that Trump officials have invoked to highlight Diversity, equity and inclusion Policies.

It is also considered illegal “to get involved in chemical and surgical castration or the mutilation of children in violation of federal or state law.” He says that includes the use of hormonal therapy or drugs that delay puberty. Define children as children under 19.

Increases concerns that whole hospital systems may not be eligible if a single department provides some attention to transgender youth. Similarly, the federal government could eliminate the benefit of entire cities that limit cooperation with federal immigration officials.

“I could see the entire cities and entire civil structures,” said Alyssa Dobson, director of financial aid at the University of Slippery Rock and a member of the regulation panel. I could also give the administration another tool in its Campaign against universities That faced the president’s policy, he said.

“Unfortunately, this may allow them to prosecute the undesirable institutions, in their opinion,” he said.

When determining if an employer must be considered not eligible, the department’s proposal will take into account judicial trials and other legal conclusions. But it leaves space for at least some degree of subjectivity, giving the Secretary of Education the authority to exclude organizations without proof of a conviction or agreement.

Defenders see ambiguity in the definition of illegal activity

If widely used, the policy could worsen the shortage of doctors and nurses, said Emeka Oguh, CEO of Peoplejoy, a company that helps employers provide relief of student loans. Panel member, he encouraged the department to use surgically, pursuing the divisions of the individual hospital instead of the systems in general.

OGUH said department officials could not provide examples of organizations that could be involved in illegal activities. When they were pressed to obtain details, the authorities said it would not be considered illegal for a hospital to illegally treat an immigrant in the country, he said. Less safe was how the department would handle the teaching lessons of teachers or schools considered DEI.

“There was a lot of ambiguity there,” said Oguh.

Some others raised concerns with a disposition that requires employers to certify that they do not participate in illegal activities. The lack of certification could also make an organization not eligible, increasing the risk that paperwork problems can jeopardize the cancellation of a large number of borrowers.

The department said it is open to making changes based on panel concerns. Ultimately, it is free to shape the proposal as you want. The agency is now preparing a formal proposal that will undergo a period of public comments before finishing it. It would be expected to enter into force in July 2026.

Last week, the Department of Education thanked the experts and said that “they helped fulfill one of the promises of President Trump to ensure that PSLF does not subsidize organizations that are violating the law.”