The Trump administration is proposing a new rule that would bar people with outstanding college loans from relief on that debt if their employers were found to be “undermining national security and American values through illegal means.”
The proposed rule, announced Monday by the Department of Education, would restrict people from participating in the federal Public Student Loan Forgiveness (PSLF) program if the organization they work for is found to be engaging in certain illegal activities.
“President Trump has given the Department a historic mandate to restore the Public Service Loan Forgiveness program to its original purpose — supporting public servants who strengthen their communities and serve the public good, not benefiting businesses engaged in illegal activity that harm Americans,” Under Secretary of Education Nicholas Kent said in a statement.
The loan program, which was launched in 2007 under President George W. Bush, is aimed at helping public employees such as teachers and police officers shed student loan debt.
The proposed rule lists some examples of what sorts of activities would be considered illegal, potentially resulting in an organization’s workers being excluded from the public service loan program. Those include assessments that an organization is aiding and abetting terrorism, violations of immigration laws, and what the rule describes as the “chemical and surgical castration or mutilation of children.”
If an individual with outstanding student loans works for an employer deemed ineligible for the PSLF, the person could still participate in the program but would have to switch to an eligible employer, according to the proposed rule.
President Trump spurred the new rulemaking process in March by issuing an executive order that directed the Secretary of Education to revise the public service loan forgiveness program. The Education Department is soliciting public comments on the proposed rule until September 17.
The White House and the Education Department didn’t immediately respond to a request for comment.
The Department of Education said the proposed regulations are necessary to preserve the original intent of the Public Student Loan Forgiveness program, which is to reward public service. The agency also said it wants to protect Americans to ensure their tax dollars do not support organizations engaged in “unlawful activity.”
“The proposed rules would halt PSLF benefits to employees of organizations that are undermining national security and American values through illegal means, and therefore not providing a public service,” the Education Department said in a statement.
Critics of the draft regulation said it would allow Education Department officials to improperly exclude some public servants from loan relief under the federal program. The Student Borrower Protection Center, an advocacy group, said in a July blog post that the rule would give the Education Department broad authority to restrict funding to groups whose work conflicts with the Trump administration’s agenda.
“To be clear, if implemented this proposal would allow the secretary [of education] to disqualify from PSLF any employees of school systems that accurately teach the U.S.’ history of slavery, of health care providers who offer gender-affirming care and of legal aid organizations that represent individuals against unlawful deportations,” Winston Berkman-Breen, legal director of the Student Borrower Protection Center, said in a June 30 public hearing on the proposal.
Introduced as part of the College Cost Reduction and Access Act of 2007, the public service loan program cancels outstanding debt for borrowers who make 120 monthly payments, or 10 years worth of payments. Currently, the program provides benefits to all government employers and all qualifying 501(c)(3) employers.
Mary Cunningham is a reporter for CBS MoneyWatch. Before joining the business and finance vertical, she worked at “60 Minutes,” CBSNews.com and CBS News 24/7 as part of the CBS News Associate Program.
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