U.S. President Donald Trump’s administration has announced plans to implement a new rule excluding nonprofits that breach key immigration laws from a federal student loan forgiveness programme, making it more difficult for their employees to qualify for debt cancellation.
Under the revised rule, announced by the U.S. Department of Education, nonprofits deemed to be “aiding and abetting violations of federal immigration laws” will no longer qualify for the Public Service Loan Forgiveness (PSLF) Programme. The policy is set to take effect in July 2026.
The PSLF programme allows student debt cancellation for Americans who work in eligible public service or nonprofit roles for a specified period. The new measure marks the latest in a series of moves by the Trump administration to link immigration enforcement to other areas of federal policy.
The Education Department clarified that nonprofits advocating for immigrants or providing legal representation would remain eligible, stating that eligibility decisions would not be based on an organisation’s political stance or policy preferences.
However, the change has sparked criticism from progressive groups. Democracy Forward, a left-leaning legal advocacy organisation, said it plans to challenge the rule in court, arguing that it unfairly targets immigration-related nonprofits.
Nearly 43 million Americans hold federal student loan debt, according to the non-partisan Congressional Research Service.
President Trump had earlier called on the Education Department to exclude borrowers working for organisations that “engage in activities that have a substantial illegal purpose.”
The new rule is expected to heighten tensions between the administration and advocacy groups that support immigrant communities, as the White House continues to tighten immigration-linked regulations across federal programmes.
