Student Loan Update: Trump Plan Could Cut Off Forgiveness for Some Workers [View all]

Source: Newsweek

Published Aug 15, 2025 at 5:56 PM EDT Updated Aug 15, 2025 at 6:44 PM EDT


Teachers, social workers, nurses and other public employees could lose access to a popular federal student loan cancellation program if the Trump administration determines their employer engages in activities with a "substantial illegal purpose," under a sweeping proposal unveiled Friday.

Why It Matters

The Education Department's plan would reshape the Public Service Loan Forgiveness (PSLF) program, which cancels federal student debt for government and qualifying nonprofit workers after 10 years of payments. The proposal targets certain nonprofits and government bodies — particularly those working with immigrants and transgender youth — raising fears it could be used as a political weapon.

What To Know

Under the plan, the education secretary would have final authority to decide if an organization should be excluded. Activities deemed "illegal" include trafficking, "chemical castration" of children — defined as hormone therapy or puberty-blocking medication for transgender youth — illegal immigration, and support for foreign terrorist groups.

President Donald Trump ordered the changes in March, accusing PSLF of sending taxpayer funds to "activist organizations" he considers a threat to national security.

Read more: https://www.newsweek.com/student-loan-update-trump-teachers-nurses-forgiveness-2114339