The Trump administration is attempting once again to narrow eligibility for the Public Service Loan Forgiveness (PSLF) program, a federal initiative that allows government and nonprofit employees to have their remaining student debt canceled after 10 years of qualifying payments. On Thursday, the Department of Education appealed a federal court ruling that blocked a regulation designed to restrict which employers qualify for PSLF. The administration has argued the changes are necessary to ensure federal benefits go only to organizations it considers engaged in legitimate public service activities.
Undersecretary of Education Nicholas Kent said previously the rule is to "ensure federal benefits go to our Nation's teachers, first responders, and civil servants who tirelessly serve their communities." Newsweek reached out to the Department of Education for comment via email. PSLF is one of the most significant student loan forgiveness programs available to federal borrowers. The program was created by Congress in 2007 and allows qualifying public servants, including teachers, firefighters, nurses and government workers, to receive forgiveness on their remaining federal student loan balances after making 120 qualifying monthly payments.
The new court appeal is ushering in new uncertainty for millions of borrowers pursuing forgiveness. Changing the definition of a qualifying employer could prevent some public service workers from accessing the relief that Congress intended them to receive, but the administration has said the proposed rule is aimed at ensuring taxpayer-funded benefits support lawful public-service organizations. The Department of Education planned to implement a rule that would have allowed the education secretary to determine whether an employer engages in activities that would disqualify it from PSLF eligibility.
Under the proposal, organizations deemed to have a "substantial illegal purpose" could be excluded from the program. These could be organizations construed as providing support for illegal immigration, terrorism or gender-affirming care services. It becomes a very slippery slope.” Two federal judges blocked the regulation from taking effect earlier this summer.
District Judge Amir Ali concluded that Congress did not grant the Education Department broad authority to independently decide which employers qualify for PSLF beyond the standards established by law. The Education Department is now appealing those court losses, seeking to revive the rule. Borrowers currently working toward PSLF will remain eligible under existing program requirements while the appeals process moves forward.
Borrowers pursuing PSLF generally must work full-time for a qualifying government employer or nonprofit organization and hold eligible federal Direct Loans or consolidate into the Direct Loan program if necessary. From there, they must enroll in a qualifying repayment plan and make 120 qualifying monthly payments while employed by an eligible public-service employer. After meeting the requirements, borrowers can apply for forgiveness through the Education Department's PSLF process.
Extract — continue reading at the source.
