No Loan Forgiveness for Terrorists Act of 2025
No Loan Forgiveness for Terrorists Act of 2025 would narrow the Public Service Loan Forgiveness (PSLF) program by excluding certain employers from qualifying as “public service jobs.” Specifically, it adds a new provision to the Higher Education Act that says an organization that engages in activities with a “substantial illegal purpose” cannot be considered a qualifying public service employer for PSLF. The bill provides a non-exhaustive list of examples of such activities, including aiding immigration violations, materially supporting terrorism, materially supporting child abuse, engaging in illegal discrimination, or repeatedly violating state tort laws. If an employer engages in any of these activities, employees working for that organization would not count toward PSLF eligibility, even if they otherwise meet other PSLF requirements. The provision references federal immigration law and Foreign Terrorist Organization designations and applies a broad interpretation of what constitutes “substantial illegal purpose.” The change would be applied notwithstanding existing PSLF definitions, effectively limiting eligibility for borrowers who work for organizations that engage in these specified activities.
Key Points
- 1The bill creates an explicit exclusion from PSLF for employment with organizations that engage in activities with a substantial illegal purpose.
- 2The enumerated activities include: (i) aiding or abetting immigration law violations; (ii) materially supporting terrorism or violent actions aimed at influencing federal policy; (iii) materially supporting child abuse (including certain forms of harm or trafficking related to “transgender sanctuary States” as described in the bill); (iv) aiding or abetting illegal discrimination; (v) repeated violations of state tort laws (e.g., trespassing, nuisance, vandalism, obstructing highways).
- 3The new exclusion is added to Section 455(m)(3) of the Higher Education Act, with a specific note that it overrides other portions of the PSLF definition (Notwithstanding subparagraph (B)).
- 4The bill references designations of Foreign Terrorist Organizations consistent with the Immigration and Nationality Act to identify terrorism-related activities.
- 5The short title is the “No Loan Forgiveness for Terrorists Act of 2025.”