Trump Moves to Limit Public Service Loan Forgiveness

President Trump is ordering changes to the Public Service Loan Forgiveness program that would disqualify workers of nonprofit groups deemed to have engaged in "improper" activities. An executive order signed Friday directs the Education Department to modify the program to deny loan relief to some borrowers. It would exclude loan forgiveness to people whose work is tied to illegal immigration, foreign terrorist groups, or other illegal activity, reports the AP. What you need to know:

• Background I: Congress created the program in 2007 to encourage careers in the government or nonprofit groups. It offers to cancel any remaining student debt after borrowers make 10 years of payments while working in public service. It's open to government workers, teachers, police, religious pastors, and certain nonprofit employees, among others.
• Background II: The forgiveness program has been the subject of a political tug of war since Trump's first term, when borrowers first started hitting the 10-year finish line. The vast majority who applied for relief in 2017 were rejected because they were found to have enrolled in ineligible payment plans or failed to meet other criteria. An investigation by a federal watchdog group concluded the Education Department had failed to make the program's eligibility rules clear.
• Biden's moves: Under President Biden, the Education Department loosened the program's rules through a federal rulemaking process, expanding eligibility to people who would have been denied previously. The administration ultimately said it had granted relief to more than 1 million people through the program, up from 7,000 who were granted cancellation during Trump's first term. The Biden administration changes were assailed by Republican lawmakers who said only Congress had the authority to change the program's rules.

• Stats: More than 2 million Americans have eligible employment and open student loans, according to December data from the Education Department. Under current rules, nonprofits are eligible if they focus on certain areas including public interest law, public health or education. Trump's order appears to target those who work in certain fields at odds with his political agenda, including immigration.
• The Education Secretary's view: At her Senate confirmation hearing, Education Secretary Linda McMahon pledged to continue Public Service Loan Forgiveness as ordered by Congress. "That's the law," she said in response to questions from Sen. Tim Kaine, D-Va.
• What's next: Advocates have gone to court to defend the program in the past, and Trump's action is almost certain to face legal challenges. Updating eligibility rules typically requires the Education Department to go through a lengthy federal rulemaking process. Any new regulation that started this year would usually not take effect until 2027.

(More loan forgiveness stories.)