HR 3739119th CongressIn Committee

No Loan Forgiveness for Terrorists Act of 2025

Introduced: Jun 4, 2025

Education

Standard Summary

Comprehensive overview in 1-2 paragraphs

No Loan Forgiveness for Terrorists Act of 2025 amends the Public Service Loan Forgiveness (PSLF) program, which forgives remaining federal student loans after a borrower makes a set number of qualifying payments while working in public service. The bill adds a new provision to exclude certain employers from being considered a qualifying “public service job.” Specifically, any employment with an organization that engages in activities with a substantial illegal purpose would not count toward PSLF. The bill provides a non-exhaustive list of activities that would trigger this exclusion, including immigration violations, material support for terrorism, child abuse or trafficking, illegal discrimination, and patterns of violating state tort laws. In short, the bill narrows which employers can qualify for PSLF, aiming to bar forgiveness for borrowers working for organizations involved in serious illegal activities. The bill is introduced in the 119th Congress by Representative Steube and referred to the House Committee on Education and Workforce. Its short title is the No Loan Forgiveness for Terrorists Act of 2025. If enacted, it would change how PSLF evaluates qualifying public service employers and potentially reduce forgiveness opportunities for some borrowers.

Key Points

1Adds a new exclusion to PSLF: employment with any organization that engages in activities with a substantial illegal purpose cannot be considered a qualifying public service job.
2Enacted as an addition to Section 455(m)(3) of the Higher Education Act of 1965, using a new subparagraph (C) that overrides other PSLF eligibility rules for the excluded employment.
3The bill provides a list of prohibited activities that would trigger exclusion, including:
4- (i) Aiding or abetting immigration law violations.
5- (ii) Material support for terrorism, including funding or operations of designated Foreign Terrorist Organizations, or violence intended to influence Federal policy.
6- (iii) Material support of child abuse, including extreme acts or trafficking of children for emancipation from parents (as defined by law).
7- (iv) A pattern of illegal discrimination.
8- (v) A pattern of violating state tort laws (e.g., trespass, disorderly conduct, public nuisance, vandalism, obstruction of highways).
9The bill retains the overall PSLF framework but excludes certain employers from being considered eligible public service employers, potentially affecting borrowers who work for organizations involved in the listed activities.
10Introduced June 4, 2025 in the House and referred to the Committee on Education and Workforce; billed as the No Loan Forgiveness for Terrorists Act of 2025.

Impact Areas

Primary group/area affected:- Borrowers seeking PSLF who work for organizations that could be engaged in any of the listed “substantial illegal” activities; their public service job may not qualify for loan forgiveness.Secondary group/area affected:- Employers that might otherwise qualify as public service employers under PSLF but could be excluded if they engage in the specified activities (or their work involves those activities).- Administrators and administrators of the PSLF program, who would need to apply the new exclusion criteria when evaluating qualifying employers and eligible payments.Additional impacts:- Clarity and enforcement: The term “substantial illegal purpose” and the scope of listed activities could raise questions about how the standard is applied to real-world organizations and roles.- Legal and policy considerations: The broad, enumerated list includes sensitive topics (e.g., immigration enforcement, terrorism, child protection, discrimination, and torts) that could be politically contentious and subject to debate about definitions and due process.- Administrative workload: Potential need for PSLF program staff to assess and verify whether an employer falls under the exclusion, potentially increasing administrative complexity for determining eligibility.

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