In a recent executive order, the White House has announced significant changes to the Public Service Loan Forgiveness (PSLF) Program, aiming to redefine what constitutes “public service” and exclude organizations involved in illegal activities from eligibility. 

Established by Congress in 2007, the PSLF Program was designed to encourage individuals to pursue careers in public service by promising to forgive their remaining student loans after completing 10 years of service and making 10 years of minimum payments. However, the current administration claims that the program has been abused through a waiver process, allowing taxpayer funds to be used to pay off loans for employees who have not yet met the statutory payment requirements.

The executive order mandates that the Secretary of Education, in coordination with the Secretary of the Treasury, propose revisions to the program’s regulations. These revisions will ensure that the definition of “public service” excludes organizations engaged in activities with a substantial illegal purpose. Such activities include:

• Aiding or Abetting Immigration Law Violations: Organizations that assist in violating federal immigration laws will be ineligible.
• Supporting Terrorism: This includes facilitating funding or operations for cartels designated as Foreign Terrorist Organizations.
• Child Abuse: Activities such as chemical or surgical castration or mutilation of children, or trafficking children to “transgender sanctuary States,” will disqualify organizations.
• Illegal Discrimination: Patterns of aiding and abetting illegal discrimination will also lead to ineligibility.
• Violating State Tort Laws: Engaging in patterns of violating laws against trespassing, disorderly conduct, public nuisance, vandalism, and obstruction of highways will exclude organizations from the program.

While there are no specific organizations currently listed under PSLF that explicitly engage in these illegal activities, the order targets nonprofits involved in contentious issues like immigration advocacy or civil rights, which could be perceived as promoting activities contrary to the administration’s views. For example, a nonprofit providing sanctuary to undocumented immigrants might be excluded due to immigration-related reasons.

Here are some examples of activities or sectors that might be impacted:

• Immigration Advocacy: Nonprofits advocating for undocumented immigrants could be affected if their activities are seen as facilitating illegal immigration.
• Civil Rights and Social Justice Organizations: Groups involved in civil disobedience or advocacy for certain social causes might be viewed unfavorably by the administration.
• Environmental Advocacy: Organizations involved in environmental protests or activism could be excluded if their activities are deemed disruptive.

These organizations would need to be reevaluated under the new criteria to determine if they remain eligible for PSLF. However, it’s crucial to note that the order’s language is broad and could potentially impact a wide range of nonprofits based on the administration’s interpretation of “substantial illegal purpose”.

The order emphasizes that it does not create any enforceable rights or benefits against the U.S. government and will be implemented consistent with applicable law and subject to available appropriations.