Restoring Public Service Loan Forgiveness
The President issued an order to revise the Public Service Loan Forgiveness (PSLF) Program.
The order addresses concerns regarding the prior administration's misuse of taxpayer funds through the PSLF program and the program's role in subsidizing organizations involved in illegal activities, from immigration violations and terrorism support to child abuse and property damage.
The Secretary of Education is tasked with revising the program's definition of "public service" to explicitly exclude organizations engaging in such activities.
Arguments For
Intended benefit: Protects taxpayer funds from being used to support illegal activities and enhances national security by preventing the subsidization of organizations that threaten the stability of the United States.
Evidence cited: The order cites the misuse of taxpayer funds in the prior administration's waiver process and the PSLF Program's misdirection of funds into organizations that harm national security and American values, sometimes through criminal means. It also points to perverse incentives that increase tuition costs and student debt.
Implementation methods: The Secretary of Education will propose revisions to 34 C.F.R. 685.219 to exclude organizations engaged in substantial illegal activities from the PSLF program.
Legal/historical basis: The order is based on the President's constitutional authority and the laws of the United States, aiming to protect the Constitution and national security. The stated purpose is to correct the prior administration's misapplication of the PSLF program.
Arguments Against
Potential impacts: May inadvertently exclude deserving public servants from loan forgiveness, potentially discouraging individuals from pursuing careers in public service. The definition of "substantial illegal purpose" may be overly broad and difficult to apply consistently.
Implementation challenges: Defining and determining whether an organization engages in "substantial illegal purpose" requires detailed investigation and could lead to protracted disputes. Coordination between agencies (Education and Treasury) may be challenging.
Alternative approaches: More targeted investigations into specific instances of fraud within the PSLF Program, rather than sweeping exclusions based on organizational affiliations. Improving oversight and enforcement of existing regulations around the PSLF Program to prevent abuse.
Unintended effects: Could lead to unintended consequences for legitimate non-profit organizations performing essential public services, impacting recruitment and retention within these sectors. May create legal challenges and burden the bureaucratic process significantly.
By the authority vested in me as President by the Constitution and the laws of the United States of America, it is hereby ordered:
Section 1. Purpose. In 2007, the Congress established the Public Service Loan Forgiveness (PSLF) Program to encourage Americans to enter the public service sector by promising to forgive their remaining student loans after they completed 10 years of service in those jobs while making 10 years of minimum payments.
The President's authority for this order stems from the US Constitution and federal laws.
The order begins by outlining that the Public Service Loan Forgiveness (PSLF) program was created in 2007 to incentivize public service by forgiving student loans after 10 years of qualifying payments and employment.
The prior administration abused the PSLF Program through a waiver process, using taxpayer funds to pay off loans for employees still years away from the statutorily required number of payments. Moreover, instead of alleviating worker shortages in necessary occupations, the PSLF Program has misdirected tax dollars into activist organizations that not only fail to serve the public interest, but actually harm our national security and American values, sometimes through criminal means. The PSLF Program also creates perverse incentives that can increase the cost of tuition, can load students in low-need majors with unsustainable debt, and may push students into organizations that hide under the umbrella of a non-profit designation and degrade our national interest, thus requiring additional Federal funding to correct the negative societal effects caused by these organizations’ federally subsidized wrongdoing.
The order alleges that the previous administration improperly used the PSLF program, paying off loans prematurely.
It further claims the program funds organizations detrimental to national security and American values, and that it creates negative financial incentives related to higher education costs and student debt.
As President of the United States, I have a duty to protect, preserve, and defend the Constitution and our national security, which includes ending the subsidization of illegal activities, including illegal immigration, human smuggling, child trafficking, pervasive damage to public property, and disruption of the public order, which threaten the security and stability of the United States. Accordingly, it is the policy of my Administration that individuals employed by organizations whose activities have a substantial illegal purpose shall not be eligible for public service loan forgiveness.
Sec. 2. Restoring Public Service Loan Forgiveness. The Secretary of Education shall propose revisions to 34 C.F.R. 685.219, Public Service Loan Forgiveness Program, in coordination with the Secretary of the Treasury as appropriate, that ensure the definition of “public service” excludes organizations that engage in activities that have a substantial illegal purpose, including:
The President asserts a responsibility to safeguard the Constitution and national security.
The administration's policy will deny PSLF to individuals working for organizations with a substantial illegal purpose.
The Secretary of Education, in consultation with the Treasury Secretary, will amend the PSLF regulations (34 C.F.R. 685.219) to reflect this policy.
(a) aiding or abetting violations of 8 U.S.C. 1325 or other Federal immigration laws;
(b) supporting terrorism, including by facilitating funding to, or the operations of, cartels designated as Foreign Terrorist Organizations consistent with 8 U.S.C. 1189, or by engaging in violence for the purpose of obstructing or influencing Federal Government policy;
(c) child abuse, including the chemical and surgical castration or mutilation of children or the trafficking of children to so-called transgender sanctuary States for purposes of emancipation from their lawful parents, in violation of applicable law;
(d) engaging in a pattern of aiding and abetting illegal discrimination; or
(e) engaging in a pattern of violating State tort laws, including laws against trespassing, disorderly conduct, public nuisance, vandalism, and obstruction of highways.
This section details specific examples of illegal activities that would disqualify organizations from the PSLF program, such as participation in actions violating immigration law, supporting terrorism, child abuse, discrimination, and violations of state tort laws.
These are provided as illustrative examples, not an exhaustive list.
Sec. 3. General Provisions. (a) Nothing in this order shall be construed to impair or otherwise affect: (i) the authority granted by law to an executive department or agency, or the head thereof; or (ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.
This section clarifies that the order does not affect the legal authority of executive departments, agencies, or the Office of Management and Budget's budgetary, administrative, or legislative functions.
It prevents the order from being misinterpreted as limiting existing governmental powers.
(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.
(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
The order emphasizes implementation must follow existing laws and funding limitations.
Furthermore, the order does not create any legally enforceable rights or benefits for individuals or organizations.