President Donald Trump said on Friday he would sign an executive order banning student borrowers from the Public Service Loan Forgiveness program if they work for nonprofits that engage in “illegal” or “improper” activities.
Though light on details — a copy of the order had yet to be posted on the White House website Friday afternoon — the plan appears to be the latest strike by the White House at pro-Palestinian groups and charity organizations opposed to his policies. Speaking before the cameras, a White House aide said it would penalize employees of nonprofits involved in “illegal immigration or foreign terrorist organizations or otherwise law-breaking activities.”
The administration pulled $400 million in funding from Columbia University Friday, citing its alleged failure to handle antisemitism on its campus. Earlier this week, Trump said he would cut off grants to universities that failed to halt “illegal protests.”
The PSLF program, which has existed since 2007, offers loan cancellation to borrowers who go to work for a nonprofit or government employer, wiping away their balance after 120 payments. The program erased over $78 billion worth of debt under the Biden administration.
Read more: How to apply for Public Service Loan Forgiveness
It’s unclear what legal authority Trump is exercising to alter the terms of the program, which his first administration proposed cutting. Using it to penalize groups that merely engage in constitutionally protected speech, such as informing undocumented immigrants of their rights or criticizing Israel, would also raise serious legal concerns.
During her confirmation hearing, Secretary of Education Linda McMahon told lawmakers that she would continue implementing PSLF, even if instructed not to — though there was no discussion of narrowing the program’s terms.
Some consumer rights groups immediately protested the move.
“This is about more than PSLF or ED policy,” Mike Pierce, director of the Student Borrower Protection Center, said. “Donald Trump is weaponizing debt to police speech that does not toe the MAGA party line. Our Democracy is on fire.”
Jordan Weissmann is a senior reporter at Yahoo Finance.
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