Trump bars civil rights and immigration nonprofits from student loan forgiveness program
Workers at ACLU and immigrant rights groups lose path to loan forgiveness
On Oct. 30, 2025, the Education Department released a final rule that changes which employers qualify for the Public Service Loan Forgiveness program. The rule excludes certain nonprofit organizations from being "qualifying employers," meaning their employees can no longer receive PSLF loan forgiveness. On Nov. 4, 2025, advocacy groups filed a lawsuit challenging the rule. The changes affect borrowers working for organizations focused on immigration advocacy, civil rights, and other causes the Trump administration opposes. The rule took effect Nov. 5, 2025, eliminating loan forgiveness for workers at organizations like the ACLU and immigration advocacy groups.
Why this matters
The Education Department''s PSLF rule shows how presidents can weaponize federal benefit programs to punish organizations that oppose their policies. By redefining which nonprofits qualify, the administration forces borrowers to choose between loan forgiveness and working for advocacy organizations. This creates financial pressure that could hollow out civil rights, immigration, and voting rights organizations by making it unaffordable to work there. The retroactive application punishes borrowers who made career decisions based on existing PSLF rules. The lawsuit will determine whether agencies can change program definitions to exclude organizations based on ideological disagreement with their missions.
Core Facts
The Education Department released its final rule on Public Service Loan Forgiveness on Oct. 30, 2025, with an effective date of Nov. 5, 2025. The rule amends the definition of qualifying employer to exclude certain nonprofit organizations.
On Nov. 4, 2025, Student Defense and Public Citizen filed a lawsuit on behalf of the Robert F. Kennedy Center for Justice and Human Rights, the American Immigration Council, The Door, and the League of United Latin American Citizens Institute challenging the new PSLF rule.
The Public Service Loan Forgiveness program was created in 2007 to encourage people to work in public service by forgiving federal student loans after 10 years of qualifying employment and 120 qualifying payments. PSLF applies to borrowers working for government organizations and 501(c)(3) nonprofit organizations.
The new rule changes which nonprofits count as qualifying employers by excluding organizations that engage in what the administration characterizes as political advocacy or partisan activities. This targets organizations focused on civil rights, immigration advocacy, voting rights, and other causes the Trump administration opposes.
The rule affects thousands of borrowers who took jobs at advocacy nonprofits specifically because PSLF made the lower salaries financially viable. These borrowers had been making qualifying payments for years expecting loan forgiveness after 10 years of service.
The Education Department said the rule restores PSLF to its intended purpose of benefitting Americans working in public service. Critics argue the rule politicizes loan forgiveness by excluding organizations based on ideological disagreement with their missions.
Previous Education Department guidance had treated all 501(c)(3) organizations as qualifying employers without distinguishing between service-oriented and advocacy-oriented nonprofits. The new rule creates this distinction for the first time.
Key Actors
Donald Trump
President
His administration issued the PSLF rule targeting nonprofit organizations that advocate for causes he opposes, including immigration rights and civil rights. The rule implements his campaign promise to eliminate what he calls woke ideology from federal programs.
Student Defense
Nonprofit Legal Organization
Student Defense, along with Public Citizen, filed the lawsuit on Nov. 4, 2025, challenging the PSLF rule on behalf of affected nonprofit organizations. They argue the rule violates the Administrative Procedure Act and exceeds the Education Department's authority.
Actionable Insights
Check if your employer still qualifies for PSLF
Contact the PSLF Help Tool or your loan servicer to verify whether your employer remains a qualifying employer under the new rule
Support lawsuit challenging PSLF rule
Contact Student Defense to provide testimony or evidence if you're affected by the rule change
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