Supporters say the new rules allow the Department of Education to politically punish organizations that work to care for immigrants and transgender people.
The U.S. Department of Education has finalized new rules that could exclude nonprofit organizations deemed to have engaged in activities with a “substantively illegal purpose” from a special student loan forgiveness program.
The rules, finalized Thursday, are expected to single out certain groups that work in areas with which President Donald Trump opposes politically, such as immigration advocacy and transgender rights.
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The new rules, scheduled to come into force in July 2026, will give the education secretary the power to ban groups that use politically charged terminology to refer to gender-affirming medicines, such as puberty-delaying drugs, and engage in activities such as the “chemical castration” of children.
It would also allow the education secretary to ban the activities of groups suspected of supporting illegal immigrants or “terrorist” organizations.
The Trump administration said its decisions “will not be made based on an organization’s political views or policy preferences.”
But supporters worry the move is the administration’s latest effort to target left-wing and liberal organizations.
President Trump has already threatened to crack down on several liberal nonprofit organizations that the White House has widely accused of being part of a “domestic terror network.”
Thursday’s rule concerns the Public Service Loan Forgiveness Program, created by a 2007 act of Congress.
In an effort to entice more graduates into public service jobs, the program promises to terminate federal student loans for public servants and many nonprofit workers after 10 years of repayment.
Public sector workers such as teachers, medical professionals, firefighters, social care professionals and lawyers can benefit.
The Trump administration defended the updated rules in a statement, calling them a necessary bulwark to protect taxpayer dollars.
The program is “designed to support Americans who dedicate their careers to public service, and does not award grants to organizations that violate the law, such as harboring illegal immigrants or performing prohibited medical procedures that attempt to separate children from their biological sex,” said Education Undersecretary Nicholas Kent.
But critics have accused the regime of making false claims of “terrorism” and criminal activity to silence dissent and restrict civil liberties.
Michael Lukens, executive director of the Amica Immigrant Rights Center, said the new rules weaponize loan forgiveness.
Lukens explained that many of the lawyers, social workers and paralegals working in his organization handle cases that stop deportations and other immigration cases.
They rely on public service loan forgiveness to take jobs that pay significantly less than those in the private sector, he said.
“All of a sudden, it’s gone,” Lukens told The Associated Press. “I hope the younger generation will wait a few more years until things get better, but if they don’t, a lot of people will leave the field and work in the for-profit sector.”
Groups have raised concerns that the education secretary has broad powers to decide whether to ban groups. Absent a legal finding, the secretary can determine whether an employer is in violation based on a “preponderance of the evidence.”
The National Council of Nonprofits was among the groups to criticize the change.
It said the rules would allow future governments of any party to change eligibility rules “based on their own priorities and ideology.”
