What student loan borrowers should know as Trump targets Public Service Loan Forgiveness Here's what you need to know
President Donald Trump signed an executive order that aims to limit eligibility for a popular student loan forgiveness program
President Donald Trump has signed an executive order that aims to limit eligibility for a popular student loan forgiveness program.
According to Trump's executive order, borrowers employed by organizations that do work involving "illegal immigration, human smuggling, child trafficking, pervasive damage to public property and disruption of the public order" will "not be eligible for public service loan forgiveness."
The Public Service Loan Forgiveness program, which President George W. Bush signed into law in 2007, allows many not-for-profit and government employees to have their federal student loans canceled after 10 years of payments.
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The order says that PSLF "has misdirected tax dollars into activist organizations that not only fail to serve the public interest, but actually harm our national security and American values."
Consumer advocates say that is not accurate, and were quick to condemn Trump's move, accusing the president of depriving debt forgiveness to those who work in fields he does not approve of.
"The PSLF program, which was created by Congress almost 20 years ago, does not permit the administration to pick and choose which non-profits should qualify," said Jessica Thompson, senior vice president of The Institute for College Access & Success.
The White House did not immediately respond to a request from CNBC for comment.
Here's what borrowers in the program need to know.
Unclear which organizations could be excluded
For now, the language in the president's order was fairly vague. As a result, it remains unclear exactly which organizations will no longer be considered a qualifying employer under PSLF, experts said.
The Trump administration might try "to exclude jobs that they deem objectionable," said higher education expert Mark Kantrowitz.
What might that mean?
In his first few weeks in office, Trump's executive orders have targeted immigrants, transgender and nonbinary people and those who work to increase diversity across the private and public sector. Many nonprofits work in these spaces, providing legal support or doing advocacy and education work.
"Borrowers that work for those organizations are concerned," said Betsy Mayotte, president of The Institute of Student Loan Advisors, a nonprofit.
Changes could take 'a year or more'
Borrowers in the PSLF program won't see an immediate effect. Trump's order requested an update to the regulations regarding the program, she said: "That process can take a year or more."
"I also suspect that this will be challenged in court," Mayotte said. "The bottom line is that 501(c)(3)s are eligible for PSLF under the law. An EO can't change."
Changes also can't be retroactive, she said. That means that if you are currently working for or previously worked for an organization that the Trump administration later excludes from the program, you'll still get credit for that time, at least up until the changes go into effect.
For now, those pursuing PSLF should print out a copy of their payment history on StudentAid.gov. Keep a record of the number of qualifying payments you've made so far.
With the PSLF help tool, borrowers can search for a list of qualifying employers and access the employer certification form. Try to fill out this form at least once a year, experts say.
This story originally appeared on: CNBC - Author:Annie Nova
