Trump administration sets rules to bar groups it opposes from loan relief

The United States Department of Education has developed new regulations that could apply to nonprofits that are alleged to have engaged in work for a “substantial illegal purpose” under a special student loan forgiveness program.

According to those rules, which were finalized on Thursday, organizations that do work in areas like transgender rights and immigration advocacy appear to be exempt.

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The education secretary has the authority to omit groups from activities like the “chemical castration” of children under the new regulations, which are set to go into effect in July 2026. They also have the authority to use a politically charged term for gender-affirming care, including medication for puberty-delaying.

Additionally, it gives the education secretary the authority to ban organizations that have “terrorist” or “undocumented immigration” activities.

The Trump administration has stated that its decisions “will not be based on the organization’s political views or preferences.”

However, some think the administration’s latest attempt to target left-leaning and liberal organizations.

Trump has already threatened to repress several liberal organizations that the White House has frequently accused of being “domestic terror networks.”

The Public Service Loan Forgiveness program, established by a law passed by Congress in 2007, is the subject of Thursday’s rules.

The program promises to end federal student loans for government employees and many nonprofit workers after ten years of payments in an effort to attract more graduates to the public service.

Among those who can benefit are those in the public sector, including lawyers, social service workers, firefighters, and teachers.

The Trump administration defended the revised regulations in a statement, calling them a necessary bulwark to safeguard taxpayer funds.

Education Undersecretary Nicholas Kent stated that the program was intended to support Americans who dedicate their careers to public service rather than to fund organizations that violate the law, whether it is by allowing illegal immigrants to live in their homes or performing medical procedures to try to stop children from having biological sex.

However, critics have criticised the administration for stifling opposing viewpoints and restricting civil liberties by making false claims of “terrorism” or criminal behavior.

The new rules, according to executive director of the Amica Center for Immigrant Rights, have weakened loan forgiveness.

According to Lukens, many of the immigration litigation workers, social workers, and paralegals at his organization handle cases involving deportations.

He claimed that they can accept jobs that pay significantly less than those in the private sector because of public service loan forgiveness.

Lukens told The Associated Press news agency, “All of a sudden, that’s going away.” We’re going to see a lot of people leave the field to work in a for-profit space, according to the younger generation, who should be able to wait this out for the next few years to see if it improves.

Organizations have expressed concern about the education secretary’s broad authority to decide whether a particular group should be barred. The secretary can decide on the basis of “preponderance of the evidence” whether an employer is violating the law in the absence of a legal ruling.

Among the organizations who criticized the change was the National Council of Nonprofits.