The Trump administration’s move to bar loan forgiveness for some public servants linked to activities deemed illegal by the White House is “ripe for further politicisation”, it has been warned.

President Biden cancelled about $188 billion (£144 billion) in student loan debts of 5 million people during his four-year term, a move blocked by the courts for being unconstitutional after he left office.

But now his successor, who has previously called loan cancellation “vile”, has given the Department of Education power to ban organisations from the Public Service Loan Forgiveness (PLSF) programme if their work has a “substantial illegal purpose”.

The rule changes could bar teachers, doctors and other public workers who aid illegal immigrants, support diversity, equality or inclusion initiatives or help transgender young people from the programme.

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Nicholas Hillman, professor in the school of education at the University of Wisconsin-Madison, said the main risk from the new rules was the precedent it sets for future changes to a programme that was first introduced in 2007 under George Bush.

Cancelling loans from groups engaging in “specific illegal conduct” decided by the administration politicises the PSLF by tying it directly to the president’s policy agenda, said Hillman.

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“Critics of the new rule argue it is an overreach of the executive branch and, considering how vaguely defined ‘specific illegal conduct’ is it seems ripe for further politicisation and decision-making by fiat.”

Sandy Baum, senior fellow at the Urban Institute and professor emerita of economics at Skidmore College, said the policy will almost certainly face lots of legal obstacles. It has already been challenged by multiple lawsuits.

“It basically amounts to allowing the administration to deny loan forgiveness to borrowers who work for organisations with which they disagree.”

She said that even though Trump has criticised tuition fees for being too high, that does not mean he would support loan cancellation.

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“[It] is a critique of higher education institutions. It does not lead to wanting taxpayers to bear the burden of forgiving student debt. It just leads to wanting to punish colleges and universities.”

Diane Jones, who was an official in the Department of Education in Trump’s first term, said forgiving loans does nothing to lower college costs and instead transfers the debt burden from someone who received educational opportunities to taxpayers who did not.

“It is an after-the-fact gimmick that may effectively buy votes, but it certainly does not solve the problem of high college costs. In fact, loan forgiveness would likely serve as an invitation to colleges and universities to increase their prices.”

Jones, who was also assistant secretary for postsecondary education when the PLSF was created under Bush, said the programme is a “mess from top to bottom” because it treats borrowers based on the tax status of their employer rather than their job responsibilities or earnings level.

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It was originally designed to help lawyers who worked in Congress or served as public defenders manage their debt, not “encourage more college graduates to work at non-profit organisations more generally”.

“The assumption that all non-profits provide a public service is false, as is the assumption that just because someone works at a non-profit organisation, they earn low wages,” she added.

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patrick.jack@timeshighereducation.com