Fact Sheet: President Donald J. Trump Restores Public Service Loan Forgiveness

Fact Sheets

TLDR

This “fact” sheet for a recent executive order attempts to whitewash the fact that it narrows eligibility for Public Service Loan Forgiveness (PSLF) by excluding organizations deemed to have a “substantial illegal purpose.” The order targets groups allegedly involved in illegal immigration, terrorism, and public disruptions. Critics call it politically motivated and potentially illegal, arguing it could affect workers at immigration advocacy, environmental, civil rights, and healthcare organizations. The administration claims it corrects “abuse” by the Biden administration, which expanded forgiveness from 7,000 to over 1 million borrowers.

The fact sheet accompanying President Trump’s executive order on Public Service Loan Forgiveness (PSLF) contains several misleading claims and politically charged language that warrant examination.

The fact sheet frames the executive order as “restoring” PSLF to its original purpose, but it actually narrows eligibility in unprecedented ways. The document uses politically charged language like “anti-American activists” without defining this term or providing evidence that such individuals were receiving loan forgiveness.

The claim that the Biden administration “abused” the program by forgiving loans “years early” misrepresents the purpose of the temporary PSLF waiver, which was designed to address the program’s notoriously high denial rate - 99% of applicants were initially rejected when forgiveness first became available in 2017. The increase from 7,000 to over 1 million borrowers receiving forgiveness under Biden reflects efforts to fix implementation problems rather than abuse.

The fact sheet alleges the Biden administration used PSLF to “pay pro-Palestinian and pro-Hamas activists and criminals with taxpayer dollars” without providing any evidence for this serious accusation.

The executive order introduces the vague standard of “substantial illegal purpose” to exclude organizations from PSLF eligibility. This ambiguous criterion could potentially affect workers at a wide range of nonprofits, including those involved in:

  • Immigration advocacy
  • Environmental activism
  • Civil rights organizations
  • Healthcare providers offering gender-affirming care
  • Organizations involved in protest movements

The order specifically targets organizations that the administration claims are involved in “illegal immigration, human smuggling, child trafficking, pervasive damage to public property, and disruption of the public order”. However, it provides no clear standards for determining which organizations meet these criteria.

Critics have called the executive order “blatantly illegal” and a “weaponization of debt intended to silence speech that does not align with President Trump’s MAGA agenda”. The order could face legal challenges on First Amendment grounds as it appears to target organizations based on their political advocacy rather than actual illegal activity.

The directive could have a chilling effect on nonprofit work and public service careers, potentially discouraging people from working at organizations that might fall out of favor with the current administration.

The fact sheet’s framing of the executive order as protecting “American values” while targeting “radical agendas” reveals its ideological nature rather than a good-faith effort to improve program administration.

ALIGNING PUBLIC SERVICE LOAN FORGIVENESS WITH ACTUAL PUBLIC SERVICE:

Today, President Donald J. Trump signed an Executive Order to end taxpayer-funded student loan forgiveness for anti-American activists.

  • The Order directs the Secretary of Education to revise the Public Service Loan Forgiveness (PSLF) program to exclude from eligibility organizations that engage in activities that have a substantial illegal purpose.
  • It stops taxpayer funds from subsidizing through loan forgiveness activities that advance illegal immigration, terrorism, child abuse, discrimination, and public disruptions.
  • It refocuses PSLF on its original intent of encouraging Americans to enter essential public service roles, such as nursing, rather than activist groups.
  • It protects national security and American values by ending federal support for organizations that harm American values and the public interest.

CORRECTING THE ABUSE OF THIS FORGIVENESS PROGRAM BY THE PRIOR ADMINISTRATION:

President Trump believes that organizations whose activities have a substantial illegal purpose shall not be eligible for public service loan forgiveness.

  • The PSLF program was created in 2007 to encourage Americans to enter critical public service jobs by forgiving the student loans of those who take such jobs after 10 years of service and loan payments.
  • The current eligibility rules allow people working for non-governmental organizations (NGOs) that advance illegal immigration, terrorism, discrimination, and violent protests to obtain taxpayer-funded loan forgiveness.
    • The Biden Administration was accused of using the student loan forgiveness program to pay pro-Palestinian and pro-Hamas activists and criminals with taxpayer dollars.
  • Further, the prior administration’s waiver process misused taxpayer funds to forgive loans years early.
    • Biden made immediate forgiveness available for people who didn’t pay the full amount, didn’t pay on time, or didn’t even enroll in the right repayment plan.
  • Prior to Biden taking office, PSLF had forgiven debt for just 7,000 borrowers, but Biden ballooned this program to erase student loans for over 1 million borrowers.
  • This abuse has increased the cost of tuition, burdened students with debt, and encouraged them to join organizations that undermine national security and the societal good.
  • This Executive Order corrects this abuse by ensuring only legitimate public servants benefit, not those engaged in illegal or harmful activities.

STOPPING TAXPAYER DOLLARS FROM FUNDING RADICAL AGENDAS: President Trump is ensuring American values guide the use of taxpayer funds.

  • By signing this Executive Order, President Trump continues to fulfill his promise to halt taxpayer funding of radical agendas.

This action builds on others he has taken in his second term to align taxpayer dollars with American values, including by terminating radical “diversity, equity, and inclusion” (DEI) preferences in federal contracting, reinstating the Mexico City Policy to stop federal funding of abortion overseas, and ending radical indoctrination in K-12 schooling.