The Department of Education announced on Thursday that public service loan forgiveness will be cut for organizations that engage in “unlawful activities,” including but not limited to supporting terrorism and aiding and abetting illegal immigration.
The department rolled out a new final rule meant to exclude recipients engaging in such activities from qualifying for student loan relief.
The rule follows President Donald Trump’s March executive order that directed Secretary of Education Linda McMahon to propose revisions to the Public Service Loan Forgiveness Program in accordance with federal law.
The executive order defines other unlawful activities as supporting minor-focused gender transitions, aiding and abetting illegal discrimination, and violating state tort laws.
“Taxpayer funds should never directly or indirectly subsidize illegal activity. The Public Service Loan Forgiveness program was meant to support Americans who dedicate their careers to public service – not to subsidize organizations that violate the law, whether by harboring illegal immigrants or performing prohibited medical procedures that attempt to transition children away from their biological sex,” Undersecretary of Education Nicholas Kent said in a statement.
“With this new rule, the Trump Administration is refocusing the PSLF program to ensure federal benefits go to our Nation’s teachers, first responders, and civil servants who tirelessly serve their communities,” he added.
The definition of “supporting terrorism” is defined as “facilitating funding to, or the operations of, cartels designated as Foreign Terrorist Organizations consistent with 8 U.S.C. 1189, or by engaging in violence for the purpose of obstructing or influencing Federal Government policy,” according to the rule’s text.
The Department of Education says it can remove PSLF eligibility if the “unlawful conduct is material” and has a “substantial illegal purpose.” Based on the language, it appears explicit support for Hamas would meet the requirements.
The department acknowledges that immaterial acts, although illegal, “may not be sufficient to withdraw eligibility.” However, an organization engaging in such acts would not be considered a qualifying employer for PSLF eligibility.
PSLF disqualification does not apply to attorneys who may be representing terrorists or illegal immigrants in court.
EDUCATION NONPROFIT PROMOTING POLITICAL VIOLENCE RECEIVED TAXPAYER FUNDING
“The Department rejects the idea that ordinary, lawful assistance such as legal advice, medical care, or humanitarian support could trigger PSLF disqualification,” the rule states. “Attorneys do not break the law, or adopt the views of their clients, by representing individuals in legal proceedings. This includes representing clients who may be unpopular, like terrorists. As such, the Department will not take action against legal employers under this final rule who are lawfully representing clients, including public defenders, or under the Legal Services Corporation Act.”
The rule, scheduled to be published in the Federal Register on Friday, will take effect on July 1, 2026.
