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Public Service Loan Forgiveness Could Become Trump Retribution Tool, Advocates Fear

UNITED STATES, JUL 7 – The Department of Education would gain authority to disqualify organizations involved in illegal acts from loan forgiveness eligibility under the proposed Public Service Loan Forgiveness changes.

  • In March, President Donald Trump's administration announced major changes to the student loan cancellation initiative aimed at limiting eligibility for loan forgiveness to exclude certain organizations.
  • The changes aim to exclude organizations involved in illegal activities such as aiding immigration violations, supporting terrorism, or providing gender-affirming care to minors.
  • The Education Department released a draft proposal outlining new criteria empowering the secretary to disqualify organizations without requiring proof of conviction or settlement.
  • Betsy Mayotte criticized the proposal as driven by political agendas and suggested it might be exploited to impose political retribution, while Alyssa Dobson expressed concern that it could unfairly affect whole cities and various public institutions.
  • The formal changes, expected to be implemented in July 2026, may create uncertainty for individuals relying on their employers' qualification to receive loan forgiveness.
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Newsweek broke the news in United States on Monday, July 7, 2025.
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