President Donald Trump has once again taken steps that could make it harder for Americans working in public service to get their student loans forgiven.
This time, the focus is on removing the nonprofit status of institutions like Harvard University, which could directly affect thousands of workers who currently qualify for student loan forgiveness through their jobs.
The Public Service Loan Forgiveness (PSLF) program was created in 2007 to encourage people to work in lower-paying but important roles in government and nonprofit sectors.
Under this program, if a person works full-time for 10 years in a qualifying job and makes regular payments on their federal student loans, the rest of their loan balance is forgiven.
More than a million people have already benefited from this.
Qualifying employers include nonprofits recognized by the IRS under section 501(c)(3), as well as local, state, and federal government bodies. Jobs in schools, hospitals, and other nonprofit service organizations often qualify.
But Trump’s latest actions are creating uncertainty around who will remain eligible for PSLF in the future.
Last month, Trump made new statements targeting the PSLF program, and now his administration has taken another step by going after the nonprofit status of Harvard University.
If the IRS removes Harvard’s tax-exempt status, employees there could lose their eligibility for PSLF. This would be a major shift affecting not just Harvard but potentially other nonprofit organizations in the future.
The conflict began when the Trump administration proposed conditions to Harvard regarding how it should hire staff, choose students, and handle political activism on campus. Harvard refused, calling the conditions unconstitutional and an attempt to interfere with the school’s independence.
In a strongly worded letter, Harvard said it would not allow itself to be controlled by the federal government.
In response, President Trump posted on Truth Social suggesting that Harvard should lose its tax-exempt status. The next day, reports came out that the IRS was looking into that possibility.
Legal experts have said that taking away Harvard’s nonprofit status won’t be easy. There’s no public evidence yet that Harvard broke any laws that would justify this step. Normally, a nonprofit can only lose its status if it fails to follow the rules set by the IRS, such as using funds for personal gain or being involved in too much political activity. So far, no such violations have been made public.
Still, if this action goes forward, it could have a major impact.
Harvard employs about 19,000 people. That number doesn’t include many more who work at Harvard-affiliated hospitals and research centers in Boston. If those workers are no longer considered employees of a qualifying nonprofit, they would be kicked out of the PSLF program and lose the chance to get their student loans forgiven.
This kind of move sets a concerning precedent.
If the government starts using tax status as a way to punish institutions for not agreeing with its policies, it could lead to more people in public service losing out on student loan relief.
For now, Harvard remains a nonprofit, and the PSLF program is still in place. But Trump’s actions have already added uncertainty for thousands of workers who depend on the promise of loan forgiveness.
And many are worried that this could be just the beginning. If more institutions are targeted, the program could slowly be weakened, affecting not only current borrowers but future ones too.
The PSLF program has already faced criticism in the past for being difficult to navigate.
Borrowers have reported problems getting their payments counted or finding out later that their jobs didn’t qualify. Now, with added pressure from the Trump administration, it’s becoming even harder for public service workers to feel secure about their loan forgiveness future.
To stay updated on PSLF program eligibility and requirements, visit the official Federal Student Aid website at https://studentaid.gov.
And for IRS information on nonprofit eligibility rules, visit the IRS website at https://www.irs.gov/charities-non-profits.
With so much at stake, many public service employees are hoping that the PSLF program stays intact and that politics doesn’t get in the way of a promise that has helped so many stay committed to service-based careers.