The Trump administration is considering making changes to the Public Service Loan Forgiveness program. It wants to exclude individuals and organizations it says are involved in “illegal activities” from having their student loan forgiven.

The program allows government employees such as teachers, firefighters and workers at nonprofits to have their student loans canceled after making payments for 10 years. Over a million people have had their loans canceled through the program under the Biden administration, according to the Associated Press.

What is the Public Service Loan Forgiveness program?

The program was created in 2007 to encourage recent graduates to pursue a career in the public sector. Nonprofit organizations are also eligible if their main focus is on public interest law, public health or education.

What changes does Trump want to make to the Public Service Loan Forgiveness program?

The Trump administration wants to cut the program for those who would be considered to be involved in “illegal activities.” The final decision would be left to the U.S. education secretary. 

The proposal lists several causes for having the program cut. One is providing legal service to immigrants, which Trump has said is “aiding or abetting” in the violation of federal immigration law. Another is the support of groups designated as a foreign terrorist organization — language Trump often uses to refer to pro-Palestinian organizations. Another cause for cutting the program is being involved in gender-affirming care for transgender youth. The proposal lists it as “engaging in the chemical and surgical castration or mutilation of children in violation of Federal or State law.” It refers to “children” as those under 19, according to the Associated Press.

Experts say changes to the Public Service Loan Forgiveness program would allow for political retribution against entire organizations like hospitals and state governments 

The Department of Education is currently preparing a proposal that will be available for public comment before being validated. It is expected to go into effect in July 2026. After it goes into effect, experts say it may affect large structures such as state governments and hospitals across the country.

“I could see entire cities and entire civil structures being targeted,” Alyssa Dobson, the financial aid director at Slippery Rock University, told the Associated Press. “This unfortunately may allow them to further chase the undesirable institutions, in their view.”

“That’s definitely an indicator for me that this is politically motivated and perhaps will be used as a tool for political punishment,” Betsy Mayotte, the president of the Institute of Student Loan Advisors, said.