Trump Administration Proposes Overhaul of Public Service Loan Forgiveness Program

The Trump administration has unveiled a plan to revamp the Public Service Loan Forgiveness program, which was created by Congress in 2007 to encourage college graduates to enter lower-paying public service fields. The new proposal would expand the definition of "illegal activity" to include organizations that work with immigrants, transgender youth, and other groups deemed to be a threat to national security. This would result in many public sector employees being cut off from the program, including teachers, nurses, and social workers.

Key Takeaways:

• The proposal would give the education secretary the final say in deciding whether a group or government entity should be excluded from the program based on a "substantial illegal purpose."
• The definition of "illegal activity" includes the trafficking or "chemical castration" of children, illegal immigration, and supporting foreign terrorist organizations.
• The proposal would exclude employees of any organization tied to an activity deemed illegal, affecting government employees, nonprofits, and schools.
• The Education Department predicts that fewer than 10 organizations would be deemed ineligible per year, but acknowledges that not all industries would be affected evenly.
• Organizations at risk include schools, universities, health care providers, social workers, and legal services organizations.
• Organizations that provide gender-affirming care in 27 states that outlaw it would be at risk of exclusion.
• The education secretary could determine independently that an organization should be ejected from the program using the "preponderance of the evidence" standard.
• A ban from the Education Department would last 10 years or until the employer completed a "corrective action plan" approved by the secretary.

Statistics:

• Fewer than 10 organizations would be deemed ineligible per year (Education Department proposal).
• The Public Service Loan Forgiveness program is open to government workers, including teachers, firefighters, and employees of public hospitals, as well as nonprofits that focus on certain areas.
• 27 states outlaw gender-affirming care.

Sources:

• Associated Press, "Trump administration proposes overhaul of public service loan forgiveness program"
• Education Department proposal, "Public Service Loan Forgiveness Program"