The Department of Education has proposed rule changes to the Public Student Loan Forgiveness Program (PSLF) that would substantially impact the eligibility for loan forgiveness for many nonprofit employees, including legal nonprofit employees, by creating a process to decertify certain employers based on the clients they help. If enacted, the new rules would redefine qualifying employers and exclude organizations judged to have a “substantial illegal purpose,” creating more uncertainty in eligibility for those committed to public service careers.
The proposed rule seeks to unlawfully bar certain charitable nonprofit employers and government entities from the program if the Department determines – by a weak preponderance of the evidence standard – that the employer engages in “activities that have a substantial illegal purpose.” Under the proposed rule, this includes:
“Aiding and abetting violations of federal immigration laws;”
“Supporting terrorism;”
“Engaging in the chemical and surgical castration or mutilation of children in violation of federal or state laws;”
“Engaging in the trafficking of children to states for the purpose of emancipation from their lawful parents in violation of federal or state law;”
“Engaging in a pattern of aiding and abetting illegal discrimination;”
“Engaging in a pattern of violating state laws” regarding trespassing, disorderly conduct, public nuisance, vandalism, or obstruction of highways.
Further, the draft rule could allow the Department of Education to disqualify employers from PSLF solely based on accusations, not convictions, or even conduct that was not illegal but merely contrary to the preference of the current administration. The rule does not specify any procedure or process for employers and employees to appeal these determinations prior to having eligibility for PSLF revoked.
This directly threatens nonprofit employers, such as civil legal aid organizations and government entities, who work to vindicate rights of all Marylanders, including undocumented immigrants and transgender persons, and advance racial and social equity. It also creates a large disincentive for young graduates to pursue careers in the public interest.
The Access to Justice Commission (A2JC) held an open meeting on September 12 with a national policy expert to educate the MD community on this issue.
Comments regarding the proposed rules changes are due by September 17. MSBA and A2JC urge everyone who may be impacted, including individuals, non-profit organizations and government entities - to submit comments thru this tool.