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Trump to Block Student Loan Forgiveness for ‘Anti-American’ Groups

Elite Personal Finance

Last Update: March 11, 2025 • Financial News •

On March 7, 2025, President Donald Trump plays a heavy hand in the Public Service Loan Forgiveness (PSLF) program by applying new provisions that target organizations involved in specific activities—anti-American activities around illegal immigration, terrorism, child abuse, discrimination, and public disturbances.

Under the new rules, advocates argue that these organizations do not deserve loan forgiveness for any individuals working within them. Now, eligibility criteria have been reset to ensure that PSLF benefits are assigned elsewhere to support pro-American causes.

Naturally, this has raised plenty of legal challenges from various advocacy groups claiming that free speech rights are being violated and that there is no clear notion of what is considered anti-American. Hundreds of nonprofit organizations benefit, which may not necessarily align with the Trump administration. However, the Trump administration argues that all of these anti-American advocacy groups should not be funded at taxpayers’ expense.

These Recent Actions Contrast With the Biden Administration

These recent actions run in stark contrast to the Biden administration, which saw the elimination of student debt for more than 5 million borrowers, along with an additional $24.5 billion charged by schools later found to be fraudulent. It also included cuts to funding for people with disabilities and income-driven repayment plans. In total, more than $183 billion in savings were granted.

Columbia University Seeing a Strong Hit

One of the most notable related cuts is the Federal Task Force to Combat Antisemitism’s plan to stop more than $400 million in contract work orders due to ongoing concerns about the university’s ability to protect Jewish students from harassment. This accounts for nearly 50% of the university’s federal funding, a large part of its annual operating revenue for 2024.

“Universities must comply with all federal anti-discrimination laws if they are going to receive federal funding,” said Secretary of Education Linda McMahon. “For too long, Columbia has abandoned that obligation to Jewish students studying on its campus. Today, we demonstrate to Columbia and other universities that we will not tolerate their appalling inaction any longer.”

“Schools like Columbia have tolerated horrific, antisemitic behavior on campus—openly calling for the murder of Jews—all while continuing to haul in hundreds of millions in taxpayer dollars,” said House Committee on Education and the Workforce Chairman Rep. Tim Walberg (R-Mich.). “Americans do not want their money sent to institutions that serve as breeding grounds for hatred and support for terrorism. I applaud the Trump administration for listening to the American people and holding institutions accountable when they fail to combat antisemitic, anti-American values.”

Impact on Public Sector Employment and Recruitment

Many have expressed concerns that changes to the Public Service Loan Forgiveness (PSLF) program will impact public sector employment and nonprofit sectors.

Many may be deterred from pursuing careers in public service now that eligibility criteria are stricter. This makes it less likely for passionate individuals to join government agencies, advocacy groups, and charitable organizations, causing staffing problems across key areas like education and social work. It may be much more challenging to attract qualified professionals to the field or provide acceptable starting salaries for recent college graduates looking for a long-term career.

What’s the impact of this newfound shift across public sector employment and recruitment? It can damage and hurt career prospects over time.

Questions Over PSLF Legal Battles and Constitutional Challenges

The new PSLF rules face critical challenges, primarily with First Amendment violations regarding their definitions of what is considered anti-American. This involves political bias and selective targeting, as ideological differences are now considered rather than objective criteria for awarding funds.

Additionally, employment across the human rights, immigration, and social justice sectors is about to take a serious hit, leading to new discrimination and hiring malpractice challenges.

What About the Possibility of the Department of Education Shutting Down?

In an earlier Elite Personal Finance news article, we reported that the Trump administration is close to shutting down the Department of Education, the country’s most significant administrative body for K-12 schools. As a result, many have speculated about the future of the FAFSA and Pell Grant programs, as well as the future of the SAVE Plan, which offered a welcome reprieve to student loan borrowers with more diverse repayment options.

Without the Department of Education in the picture, many have called for interest-free forbearance programs that work to maintain or even increase average credit scores among recent college graduates.

One of the more popular programs belongs to income-driven repayment (IDR) plans, which allow borrowers to set payments based on a specified percentage of their discretionary income for up to 25 years, depending on the program. Of course, there are different types of programs, like the Pay As You Earn Repayment Plan (PAYE), Revised Pay As You Earn Repayment Plan (REPAYE), and Income-Contingent Repayment (ICR), each with different rules regarding the percentage of monthly payments that go toward debt, as well as the number of years in effect.

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