Student loan Forgiveness eligibility Questioned as Education Department Proposes New Rules
PHILADELPHIA – A Philadelphia healthcare worker’s decade-long plan to qualify for public service loan forgiveness is now in jeopardy as the Education Department proposes changes to the definition of qualifying employers, potentially excluding those involved in “illegal activities.” The proposed rule change,directed by the White House,has sparked fears among borrowers who have diligently pursued careers in public service with the expectation of debt relief.
Murphy, a Temple Health employee in Philadelphia, had been on track to have her student debt forgiven after 10 years of qualifying payments. Temple Health, a nonprofit medical system, currently meets the criteria for the Public Service Loan Forgiveness Program (PSLF). However,the new regulations could invalidate that qualification,leaving Murphy – and potentially many others – burdened with debt well into retirement.
The Education Department has proposed amending the definition of employers that qualify for loan forgiveness by excluding those involved in “illegal activities,” according to a statement released by the department.
“The Public Service Loan Forgiveness Program exists to serve American heroes like teachers, police officers, and firefighters – not individuals or employers engaged in illegal activities that harm Americans,” said Ellen Keast, deputy press secretary at the Education Department, in a statement to CNN. “The Department has no business subsidizing the employees who work for organizations that break the law by mutilating and maiming healthy children or aiding and abetting illegal immigration and terrorism.”
The proposed changes have raised concerns about the breadth of the “illegal activities” definition and its potential impact on a wide range of organizations. Murphy expressed worry about the financial implications, noting her high debt-to-income ratio despite consistently making on-time payments.
“I will go into retirement with student debt,” Murphy said.
