Trump admin rule bars student loan relief for public workers tied to illegal activity

washington: the trump administration is moving ahead with a new rule that would bar some nonprofits from the federal public service loan forgiveness (pslf) programme if their work is deemed to have a “substantial illegal purpose” — a move that could cut off loan relief for teachers, doctors, and other public service workers.finalised on thursday, the rule expands the education department's authority to exclude organisations from the pslf programme. officials said the measure is intended to prevent taxpayer money from supporting lawbreaking entities, but critics argue it politicises student loan forgiveness and could target specific advocacy groups.set to take effect in july 2026, the policy primarily affects organisations working with immigrants and transgender youth. it empowers the education secretary to exclude groups engaged in activities such as “chemical castration” — defined as puberty-blocking hormone therapy — illegal immigration, or supporting terrorist organisations.the pslf programme, created in 2007, forgives federal student loans for government and nonprofit workers after 10 years of payments. it has already cancelled loans for more than a million americans.civil rights advocates say the rule could disproportionately impact lawyers, teachers, and social workers involved in immigration and gender-affirming care. the american bar association warned it may reduce the number of public defenders, while the national council of nonprofits said it gives any administration excessive power to redefine eligibility based on ideology.education undersecretary nicholas kent defended the policy, saying it ensures taxpayer funds are not used to subsidise “organisations that violate the law.”under the rule, excluded employers may reapply for eligibility after 10 years or sooner by adopting a corrective plan approved by the department.