Tampa Student Loan and Bankruptcy Lawyer Blog — March 10, 2020
President Trump recently signed an executive order entitled Restoring Public Service loan forgiveness. While this should have to go through the normal channel of rulemaking which will take approximately one year, it appears that PSLF will be excluded for non-profits which engage in a “substantial illegal purpose” including:
(a) aiding or abetting violations of 8 U.S.C. Supporting terrorism by engaging in violence to influence Federal Government policy, or by facilitating funding or 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.
While some believe this is a slippery slope, I see these changes to PSLF being done to otherwise further the Trump agenda. It is clear that any agency that has a DEI policy will be excluded from the public service loan forgiveness. This Executive Order should not affect PSLF for most people. However, for most folks PSLF should remain unchanged under this Executive Order.
Importantly, it does not reverse the waiver process which I believe refers to the IDR Recount or the Cares Act allowance for PSLF credit during Covid despite the suspension of payments.
If you have years left before you are eligible for a PSLF discharge, you might want to look closely at your employer. You may not be eligible for PSLF if you work for an “activist group” as Trump has described it. You can also pay on the 10-year Standard Plan. Just make sure that it is amortized within 10 years and not over 30. These payments will count towards PSLF. That’s important to know if IDR processing is shut down for more than a couple weeks or if you don’t have the partial hardship required for IBR enrollment.
To help determine your options and which repayment plan is best in your specific situation, think about reaching out to us for a student loan strategy session – click the blue box below to schedule by Zoom or phone. You can also call 813-258-2808.
