Trump Restricts Loan Forgiveness for Nonprofit Workers (1)

President Donald Trump signed an executive order that restricts eligibility for a government-run student loan forgiveness program, targeting individuals whose work for nonprofit organizations clashes with the administration’s immigration and other policies.

The order directs the Education Department and Treasury Department to rescind student loan forgiveness for people who work for nongovernmental organizations “that not only fail to serve the public interest, but actually harm our national security and American values, sometimes through criminal means.”

The document didn’t cite any examples.

Organizations involved in “iding or abetting violations” of immigration law and the “trafficking of children to so-called transgender sanctuary states for purposes of emancipation from their lawful parents, in violation of applicable law,” would be excluded, Trump said.

Donald Trump

Photographer: Chris Kleponis/CNP/Bloomberg

A public servant student loan forgiveness program created in 2007 allows borrowers, who work in jobs such as teaching, nursing and public safety, to receive full forgiveness of federal student loans after paying their debt for at least 10 years, as long as they remain in a public-service profession. Employees of not-for-profit organizations are typically eligible for forgiveness with some restrictions.

Earlier: Trump Floats Handing Off Student Loan Management to Treasury

Former President Joe Biden made an effort to increase the number of people who had their loan balances wiped out under the public service forgiveness program, after many applicants were denied or never received loan cancellation. Before those efforts, only 7,000 public service workers received any form of debt cancellation through the initiative, according to the Biden White House.

Trump and his allies have assailed Biden’s campaign to provide student loan relief, saying the efforts were unfair to borrowers who had paid off their debt or did not attend college.

Trump has also vowed to shutter the Education Department, which oversees billions of dollars in federal student aid. On Thursday, the president floated moving its student-loan portfolio to the Treasury Department, Commerce Department or the Small Business Administration.

During her confirmation hearing, Trump’s Education Secretary Linda McMahon committed to “honor” the public service loan forgiveness program, which was created by Congress. She also told lawmakers that the administration did not intend to “defund” initiatives mandated by law, but said those programs could be moved to other agencies.

(Updates with details of the order.)

To contact the reporter on this story:
Akayla Gardner in Washington at agardner81@bloomberg.net

To contact the editors responsible for this story:
Justin Sink at jsink1@bloomberg.net

Laura Davison, John Harney

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