EO: PUBLIC SERVICE LOAN FORGIVENESS (PSLF) REFORM

TL;DR

This executive order represents a significant rollback of PSLF eligibility [making it much harder for public servants to have their loans forgiven], limiting access for individuals employed by organizations deemed to have "substantial illegal purposes." [like what? a convicted felon cares about “illegal purposes”?] It frames these changes as necessary for national security and fiscal responsibility [but really, national security for student loan forgiveness]. However, the order’s broad criteria for exclusion could face legal challenges and administrative hurdles in implementation.

Key Facts:

• The PSLF Program was established in 2007 to encourage public service careers by forgiving student loans after 10 years of qualifying service and payments.

• The prior administration expanded PSLF eligibility through waivers, which this order criticizes as an abuse of taxpayer funds.

• The administration argues that PSLF funds have been misallocated to organizations that allegedly harm national security, increase tuition costs, and engage in illegal activities.

• The order seeks to restrict PSLF eligibility for employees of organizations engaged in activities with a "substantial illegal purpose."

Key Provisions:

• Policy Shift: The administration mandates that PSLF funds should not support organizations that:

  • Violate federal immigration laws.

  • Support terrorism or criminal cartels.

  • Engage in child abuse, including gender-affirming care for minors.

  • Aid illegal discrimination.

  • Repeatedly violate state laws on public disturbances and vandalism.

• Regulatory Changes: The Secretary of Education, in coordination with the Treasury, must revise the PSLF regulations (34 C.F.R. 685.219) to align with these exclusions.

• Implementation Conditions: The order does not create enforceable rights and must be implemented within the bounds of existing law and budget constraints.

What is 34 C.F.R 685.219?

The regulation 34 C.F.R. 685.219 outlines the rules for the Public Service Loan Forgiveness (PSLF) Program. Specifically, it defines eligibility for PSLF, which offers forgiveness of federal student loans for individuals who work in qualifying public service jobs for at least 10 years while making qualifying monthly payments.

• Eligibility Criteria: It specifies which types of public service jobs qualify for the program, including jobs in government, non-profit organizations, and other qualifying public service roles.

• Qualifying Payments: The regulation defines the type of payments that count toward forgiveness, including the 120 monthly payments required for loan forgiveness.

• Documentation and Certification: The regulation includes guidelines for how borrowers can certify their employment and payments to ensure they are on track for forgiveness.

• Exclusions: It also defines which jobs and types of employment do not qualify for PSLF.