Despite recent rumblings in Washington, Public Service Loan Forgiveness is still the law of the land. In the first week of March, the White House issued an executive order directing the Department of Education to “restore PSLF” by “ensur[ing] the definition of “public service” excludes organizations that engage in activities that have a substantial illegal purpose.” These activities include a number of controversial topics such as immigration law; diversity, equity, and inclusion; LGBTQ issues; and free speech and organizing. The order also further codifies efforts by the White House to eliminate the Dept. of Education—and transition student loan administration to the Dept. of the Treasury—by including the Secretary of the Treasury in such decisions.
As borrowers are already reeling from other student loan actions, this order injects further uncertainty and chaos into an already confused system. Fortunately for those who rely on PSLF, neither the Secretaries of Education nor Treasury have the authority to make the changes suggested by this order. When PSLF was created with bipartisan support in 2007 as part of the College Cost Reduction and Access Act, the bill used a broad, but specific definition of those who qualify as having
“a full-time job in emergency management, government, military service, public safety, law enforcement, public health, public education…or at an organization that is described in section 501(c)(3) of the Internal Revenue Code…or teaching as a full-time faculty member at a Tribal College or University…and other faculty teaching in high-needs areas, as determined by the Secretary.’’
Nowhere does the bill give the Secretary (or anyone, for that matter) the authority to restrict eligibility based on their employer’s activities, as long as they belong to one of the public service organizations already outlined. In short: this executive order changes nothing for now. Federal Student Aid, in fact, tweeted just a couple of days later saying that “the PSLF Program is not changing today, and borrowers do not need to take any action.” Because PSLF was created by Congress, it will take an act of Congress to change it.
If you have concerns about how this order may affect your PSLF eligibility, or have questions about how executive orders, etc. could affect your repayment progress, give us a call. We can provide you with up-to-date information about recent legal actions and help you find the best path forward in the ever-shifting landscape of student loans.
