New Trump Admin Rule Violates Statute Establishing Public Service Loan Forgiveness Program
WASHINGTON, D.C. — Today, the Department of Education made public a new rule allowing the agency to declare employees of certain non-profit organizations ineligible for Public Service Loan Forgiveness (PSLF). The rule will go into effect in July.
The PSLF program enables student loan borrowers who work in public service jobs for ten years to have their federal student loans forgiven. The statute creating the program defines a public service job to include a full-time job at a 501(c)(3) tax-exempt charitable organization.
The new rule, however, will deny PSLF eligibility to employees of organizations that the Secretary of Education deems to have a “substantial illegal purpose,” which the rule defines as including aiding and abetting the violation of immigration laws, engaging in a pattern of aiding or abetting illegal discrimination, and providing certain gender-affirming care to children in violation of state or federal law. Under the rule, the Department of Education can decide for itself whether an organization meets this standard.
Cormac Early, a lawyer with Public Citizen Litigation Group, issued the following statement:
“The Trump administration’s new rule violates the statute establishing the PSLF program and Congress’s clear directive to provide loan forgiveness to all eligible employees of 501(c)(3) organizations. The rule invites arbitrary enforcement and will chill the legal activities of organizations, particularly those who work in areas such as immigration and equity and inclusion.
“The PSLF program provides a benefit to workers who are devoting themselves to public service. It should not be used to punish employees of organizations that are ideologically at odds with the administration or to keep those organizations from conducting their public service work.”