\n<\/p>\n
Employees at any company the Trump administration deems as having \u201ca substantial illegal purpose\u201d will no longer qualify for Public Service Loan Forgiveness under a new set of regulations finalized Thursday by the Department of Education.<\/p>\n
The final rule is very similar to the first draft released in August\u2014both of which have been heavily criticized. The policy change, in the works for months, stemmed from an executive order issued in March. Lawsuits challenging the new rule, which takes effect July\u00a01 of next year, are expected as soon as next week.<\/p>\n
\u201cMy first reaction when reading the rule was that we will see them in court,\u201d said Brian Galle, a law professor at the University of California, Berkeley, who submitted a comment along with at least a dozen other scholars of tax\u00a0law. <\/p>\n
Collectively, the commenters called on department officials to conduct an extensive review and study over the rule, none of which were completed. So now, Galle said, the department will face the consequences.<\/p>\n
\u201cI know that firsthand,\u201d he explained. \u201cA rule that I wrote for the Securities and Exchange Commission was sent back by the Fifth Circuit because there was one statistical study that the agency didn\u2019t do.\u201d<\/p>\n
Under the new rule, illegal activities will include: aiding and abetting violations of immigration or civil rights law, supporting terrorism, providing gender-affirming care, or \u201ctrafficking\u201d children from one state to another for purposes of emancipation. The education secretary will decide whether an employer violates the rule based on a \u201cpreponderance of the evidence.\u201d<\/p>\n
Many Democrats, industry leaders and student borrower advocates who have spoken out against the rule say it is vague and could allow Trump and future presidents to abuse executive power, essentially choosing which organizations qualify based on ideological preferences.<\/p>\n
Rep. Bobby Scott, a Virginia Democrat and ranking member of the House Education and Workforce Committee, told Inside Higher Ed<\/em> that the rule \u201copens the door for all kinds of mischief.\u201d<\/p>\n \u201cIf you\u2019re on the Trump side of the partisan political agenda on an issue, you get loan forgiveness. If you\u2019re on the other side of the controversy, you don\u2019t,\u201d he explained. \u201cA group promoting civil rights may be in jeopardy.\u201d <\/p>\n The National Council of Nonprofits went as far as declaring the new rule \u201cunlawful\u201d and saying it sets \u201ca troubling precedent.\u201d<\/p>\n \u201cFederal law makes clear that eligibility under PSLF applies to all charitable nonprofit organizations,\u201d the organization wrote. \u201cThe Education Department does not have the authority to change eligibility. By unlawfully excluding certain nonprofits, the final rule opens the door to government overreach and abuse.\u201d<\/p>\n The Trump administration and fellow Republicans, however, say it has nothing to do with partisan politics and instead is focused on terminating unlawful actions that by their “very nature run contrary to the public good.\u201d<\/p>\n \u201cAs the name suggests, Public Service Loan Forgiveness was intended to help meet workforce needs for employers who serve the public good. Unfortunately, the open-ended nature of PSLF has forced taxpayers\u2014many of whom never went to college, to foot the bill for employees at radical organizations that violate state and federal laws,\u201d Rep. Tim Walberg, a Michigan Republican and chair of the Education and Workforce Committee, said in his statement about the rule. <\/p>\n Education Under Secretary Nicholas Kent also chimed in, saying in a statement that \u201cthe Trump Administration is refocusing the PSLF program to ensure federal benefits go to our nation\u2019s teachers, first responders, and civil servants who tirelessly serve their communities.\u201d <\/p>\n In addition to defining what activities are illegal, the rule outlines types of evidence that the secretary may consider in the decision process, establishes an appeals process and states that the department must provide \u201cprompt notification\u201d to both borrowers and employers when their eligibility is at risk. It also notes that, in general, employers with \u201cminor compliance issues\u201d and \u201cno concerted practice of illegal activity\u201d will be safe.<\/p>\n The department estimates that fewer than 10 employers will be affected each year. But critics say that estimate is based on little research and worry the effect will be much broader. <\/p>\n The National Council of Nonprofits said ultimately the rule could harm millions, as countless communities depend on their local nonprofits. By putting the nonprofit workforce at risk, they added, the rule jeopardizes nonprofits\u2019 ability to meet those needs and provide essential services.<\/p>\n A collection of half a dozen physicians\u2019 groups echoed that point, arguing that if hospitals and the medical professionals they employ lose access to PSLF, it could jeopardize both physicians\u2019 financial stability and patients\u2019 access to care.<\/p>\n \u201cPSLF is not just a loan program; it is a lifeline that allows medical graduates to choose primary care or psychiatry careers in high-need areas without being weighed down by insurmountable debt,\u201d the group wrote in a news release. \u201cWe strongly urge the Department of Education to preserve physicians\u2019 access to the PSLF program and recognize that a healthy America depends on a strong physician workforce.\u201d<\/p>\n Galle from Berkeley believes that this lack of awareness regarding the scope of impact will become evident in court. He said that such a lack of evaluation, along with what he sees as the department\u2019s executive overreach in issuing the rule, will give any plaintiffs a strong case in court. <\/p>\n \u201cThe Supreme Court in the last eight years has really been at pains to say that Congress doesn\u2019t give agencies\u00a0\u2026 the authority to be way outside their lane,\u201d he said. \u201cAnd you couldn\u2019t possibly be further outside your lane and your expertise than ED is with this rule.\u201d <\/p>\n Shortly after the department announced the final rule, multiple legal groups said they intend to sue over it.<\/p>\n Democracy Forward, which has led a number of lawsuits against the Trump administration this year, and Protect Borrowers, a student loan advocacy group, described the new policy as \u201ca craven attempt to usurp the legislature\u2019s authority in an unconstitutional power grab.\u201d <\/p>\n Student Defense, a policy, litigation and advocacy organization, accused the president of \u201cplaying political football with the financial well-being of people who have dedicated their lives to public service.\u201d<\/p>\n All three said a lawsuit can be expected in a matter of days.<\/p>\n \u201cCongress created the Public Service Loan Forgiveness program because it is important for our democracy that we support the people who do the hard work to serve our communities,\u201d Democracy Forward wrote in its release. \u201cIn our democracy, the president does not have the authority to overrule Congress.\u201d<\/p>\n Galle said the key question in the legal fight will be whether the Supreme Court will enforce those checks and balances.<\/p>\n \u201cUnder any judge or justice who was applying the law as it is today, I don\u2019t think this rule would have any hope of being upheld,\u201d he said. \u201cThe only room for doubt is that it seems like the Supreme Court is willing to ignore most of what current law is.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":" Employees at any company the Trump administration deems as having \u201ca substantial illegal purpose\u201d will no longer qualify for Public Service Loan Forgiveness under a new set of regulations finalized Thursday by the Department of Education. The final rule is very similar to the first draft released in August\u2014both of which have been heavily criticized.<\/p>\n","protected":false},"author":1,"featured_media":31871,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[57],"tags":[11542,5512,3340,18487,1156],"class_list":{"0":"post-31870","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-education","8":"tag-finalizes","9":"tag-forgiveness","10":"tag-limiting","11":"tag-pslf","12":"tag-rule"},"_links":{"self":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/31870","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=31870"}],"version-history":[{"count":0,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/31870\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/media\/31871"}],"wp:attachment":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=31870"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=31870"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=31870"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}