White House Moves One Step Closer To Changing Who Can Recieve Student Loan Forgiveness

The White House moved closer to restricting the number of nonprofit and public workers who can receive student loan forgiveness.

Under the Public Service Loan Forgiveness program, public service workers, such as teachers, firefighters, and some nonprofit organization workers, get their remaining student loans canceled after 120 qualifying payments. Last week, the department finished the negotiated rulemaking process that developed a proposal allowing the Secretary of Education to exclude some employers from the PSLF if they “engage in activities that have a substantial illegal purpose.”

Student loan advocates say the rule would allow the department to use PSLF as a weapon to police what some public and nonprofit employers can do based on Secretary Linda McMahon’s opinions of their work.

A draft version of the rule says activities like providing puberty blockers or sex hormones for transgender youth, violating Federal immigration laws, and illegal discrimination are examples of work that could get an organization removed.

The Proposed Rule Could Block Employers from PSLF Based On Subjective Beliefs, Advocates Say

Advocates said that Doctors and nurses at nonprofit hospitals may be excluded from PSLF under the rule, as most emergency departments help patients regardless of their legal status. Additionally, some nonprofit groups provide grants for transgender youth and their families to travel for gender-affirming medical care.

These organizations that currently qualify for PSLF could be in danger if the secretary decides they are engaging in illegal activities, advocates said.

“When Congress passed the PSLF law, it said that all government employers and all non-profit employers qualify, without including any exceptions,” wrote The Institute for College Access and Success, a college student advocacy group. “The Department’s claim that it can limit eligibility for any employer based on its alleged conduct conflicts with the PSLF law and has no statutory basis.”

The rulemaking process was convened to comply with an executive order President Donald Trump issued in March. The order instructed the Education Department to deny PSLF eligibility for those working for “activist organizations” that “harm our national security and American values.”

The Education Department said it will publish the proposed rule in the Federal Register, where anyone can comment before it is finalized.