Higher Education Costs and Challenges

• A new Education Department rule could disqualify some nonprofit workers from Public Service Loan Forgiveness (PSLF).

• The rule allows the agency to bar entire organizations if they engage in activities deemed “substantially illegal.”

• Critics say the move politicizes student debt relief and threatens borrowers close to forgiveness.

Thousands of nonprofit employees may soon lose eligibility for federal student loan forgiveness under a sweeping new Education Department rule that redefines who qualifies for the Public Service Loan Forgiveness program.

The 185-page regulation, published Thursday, gives the education secretary power to disqualify entire employers — not just individual workers — if their organizations are found to have a “substantial illegal purpose.” The rule, which takes effect July 1, fulfills a directive from President Donald Trump’s March executive order targeting nonprofits accused of supporting “illegal immigration, child trafficking, pervasive damage to public property and disruption of the public order.”

That means workers at nonprofits serving undocumented immigrants, providing gender-affirming care to minors, or taking part in protest movements could lose PSLF eligibility. Payments made after a group is disqualified would no longer count toward the 120 qualifying payments required for forgiveness.

Activities that could trigger disqualification

Among the listed disqualifying activities: aiding violations of federal immigration law, supporting terrorism, performing gender-transition procedures on minors where prohibited, trafficking minors across state lines for emancipation, or engaging in organized violence to influence policy.

Employers may appeal if removed from the program, but the Education Department said payments made after disqualification will not count toward forgiveness even if the appeal later succeeds.

The change could affect a broad range of community organizations — from legal-aid groups and immigrant-rights advocates to health clinics and humanitarian charities — that rely on PSLF eligibility to recruit and retain staff.

Administration officials said the rule restores the program’s original purpose. “This regulation refocuses the PSLF program to ensure federal benefits go to our nation’s teachers, first responders, and civil servants who tirelessly serve their communities,” said Undersecretary of Education Nicholas Kent.

Conservative lawmakers applauded the move. “Taxpayers shouldn’t be forced to subsidize employees of radical organizations that violate state and federal laws,” said Rep. Tim Walberg (R-Mich.), chair of the House Education Committee.

But Democrats and borrower advocates blasted the rule as politically motivated. Rep. Robert C. “Bobby” Scott (D-Va.) said it “follows the Trump Administration’s disturbing pattern of making repayment less affordable and attempting to police political speech.”

Jaylon Herbin, director of federal policy at the Center for Responsible Lending, called the policy “a cruel trick” that would saddle public workers with decades of additional debt and worsen shortages in critical community services.

Program with high stakes for millions

Created in 2007 under President George W. Bush, PSLF was designed to encourage graduates to pursue careers in public service by erasing their remaining federal student loan debt after 10 years of qualifying payments.

More than 1 million borrowers have already received forgiveness under the program. If the new rule withstands anticipated legal challenges, experts say it could reshape PSLF’s reach across more than 20 economic sectors — and upend forgiveness for thousands of borrowers already nearing the finish line.

What this means for borrowers

• If you are already working in a qualifying job and meeting the rules (qualifying loan type, full-time with a qualifying employer, making qualifying payments, submitting required certification), you should continue doing so and keep tracking your progress.

• If your employer is a nonprofit or governmental entity, you’ll want to check whether your employer is (or will be) considered a “qualifying employer” under the updated rules. Any changes or uncertainty about your employer’s eligibility could impact your path to forgiveness.

• Because the rules are in flux, it’s advisable to document your employment history, payments, certifications, and keep up-to-date with communications from loan servicers and the Department of Education.

• If you’re considering starting public-service employment specifically for PSLF eligibility, you may want to ask: “Will this job/employer still qualify if the rules change?” — especially for nonprofits that may have ambiguous status.

• More than 5.3 million borrowers are at risk of wage garnishment as collections resume after a pandemic pause.
• Borrowers in default will soon receive notices about involuntary collection actions starting May 5
• Options remain for borrowers to rehabilitate loans or avoid collections, but time is running out.

The Education Department today (May 5) begins referring student loans that are in default to collections, ending a more than four-year pause that began during the COVID-19 pandemic.

The move affects roughly 5.3 million borrowers who have fallen into default on their federal student loans and now face severe consequences, including wage garnishment, tax refund interception, and seizure of Social Security payments. The pause on collections, first implemented in March 2020, was extended multiple times by the Biden administration but officially ended last October.

“I wanted to throw up because I already live paycheck to paycheck,” said Kat Hanchon, 33, who owes nearly $85,000 in student loans from undergraduate and graduate degrees, in an Associated Press report. Hanchon, who works in higher education IT, said she’s struggled even with an income-driven repayment plan and has not been able to make payments since late last year.

The department will soon begin sending out notices informing borrowers of upcoming collection efforts, which are scheduled to begin on May 5 through the Treasury Department’s offset program.

Understanding default and what happens next

Student loans become delinquent when payments are missed for 90 days, and after 270 days of nonpayment, loans officially go into default. Default can severely damage a borrower's credit and trigger aggressive collection actions.

The Education Department advises borrowers to check their loan status via studentaid.gov and to update their contact information to ensure they receive important notices.

Paths out of default

Options for borrowers include:

• Loan rehabilitation, where borrowers make nine consecutive monthly payments to restore their loans to good standing.

• Income-driven repayment plans, which adjust monthly payments based on income and family size.

• Forbearance for delinquent borrowers (not those already in default).

Experts emphasize acting quickly. “Loan rehabilitation is a strong option, but it can only be done once,” said Betsy Mayotte of The Institute for Student Loan Advisors.

Looking ahead

With collections set to resume imminently, millions face financial strain if they don’t take swift action. Borrowers are urged to explore their repayment and rehabilitation options to avoid the harshest penalties.

Newsletter

The COVID-19 pandemic has drawn more attention to disparities in internet access across the country. 

Now, researchers from Rice University have analyzed the benefits of schools investing more money into providing internet access to their students. Based on a survey of Texas public schools, the team found that expanding internet access was associated with improved classroom performance. 

“We are proud that Texas public schools can serve as a live learning case for understanding education policy,” said Vikas Mittal, one of the study’s authors. “Investments in internet access provide clear and meaningful academic benefits. Yet, schools need to implement policies to address increased disciplinary issues such as cyberbullying.” 

Kids are doing better in school

For the study, the researchers looked at data from more than 9,000 public schools throughout Texas. The team was interested in looking at how each school’s spending on internet access affected their students’ learning and behavioral outcomes between 2000 and 2014. 

From an academic standpoint, increasing internet access among student populations was a positive investment. Greater internet access was associated with higher SAT scores, better in-class performance, and higher graduation rates. 

The researchers also found that having greater internet access benefited students beyond their schooling years. They found that making the investment to provide more students with internet access led to a greater economic return long-term. 

Social repercussions

Though the academic outcomes were beneficial, the researchers also found that when more students had internet access, it negatively impacted their social dynamics. The study showed that disciplinary problems, including cyberbullying, increased as more students gained access to the internet. 

Though these findings are important, this study was conducted prior to the COVID-19 pandemic, and the researchers don’t believe these results will translate to virtual learning scenarios. 

“K-12 education has transformed into virtual learning due to COVID-19,” Mittal said. “Our research conclusions apply to a setting where physical learning is supplemented by internet access."

On top of the coronavirus-driven stimulus checks that the Biden administration is trying to push through, congressional Democrats are also asking for a $7.6 billion boost to help schools and libraries pay for students' distance learning costs as part of the relief package.

Frank Pallone (D-NJ), the Chairman of the House Energy & Commerce, announced the proposed allocation as part of the committee's package of recommendations for the COVI-19 budget reconciliation legislation.

If granted, the add-on would establish a $7.6 billion “Emergency Connectivity Fund” that would allow schools and public libraries to pay for internet service, Wi-Fi hotspots, modems, and routers, as well as digital devices for students and teachers to access the internet from their homes. The Federal Communications Commission would be tasked with implementing the fund.

Some regulators believe Pallone might be jumping the gun a bit. House Energy and Commerce Republican Leader Cathy McMorris Rodgers (R-WA) sent a letter urging him to pause what she called a “partisan sprint” towards a reconciliation package. She asked him to sit tight for one week so that “earnest, bipartisan negotiations” for coronavirus relief could be discussed.

Pandemic learning challenges continue to mount

The pandemic has created an untenable distance learning situation for millions of students. According to recent data from the Department of Education and other sources, the number of students without home internet ranges between 9 and 12 million, or about 14-16 percent of children ages 3-18.

Depending on parental education and family income, a good number of students’ only internet access is via a smartphone. Those numbers run as high as 17 percent for students whose parents never finished high school and 13 percent for students whose family income is in the lowest quarter.

If you’re going to borrow tens of thousands of dollars to secure a college degree, getting the best return on investment (ROI) takes on added importance.

Each year, The Princeton Review ranks 200 U.S. colleges for ROI, looking not only at costs but also salaries earned by graduates. In short, The Review is a guide for college-shoppers looking for an affordable, academically outstanding college that has a record of guiding students to rewarding careers.

Only 200 schools make the cut. They’re selected on an analysis of things like covered academics, cost, financial aid, career services, graduation rates, student debt, and alumni support.

Making the list doesn’t mean a school is among the least expensive to attend. It only means that, in the opinion of the editors, it’s worth the money.

"Only 7 percent of the nation's four-year colleges made it into this book," said Robert Franek, its lead author and The Princeton Review's editor-in-chief. "We salute them for their stellar academics and generous aid awards to students based on need and/or merit. They also provide their undergrads with career services from day one plus strong networks of alumni connections."

Several different lists

The book is not a single list but a number of them, with the editors ranking schools on different criteria. There is an overall main ranking list and it places the California Institute of Technology in the top spot. Stanford was second, followed by Princeton and MIT.

Internships have been proven to be an effective pathway to securing a good job after graduation, and The Princeton Review ranks colleges on their ability to help students become interns. Bentley University is number one, followed by Franklin W. Olin College, Wabash College, and the University of Richmond.

Just as important is assistance in getting jobs for graduates. Harvey Mudd College, in Claremont, Calif., ranks first, followed by the California Institute of Technology, Stanford, and MIT.

Best financial aid

If you are looking for a school with a generous financial aid package, there’s a list for that as well. Bowdoin College of Brunswick, Maine is at the top of the list for financial aid. It’s followed by Vassar, Princeton, and Yale.

Other categories include the best alumni network, where Pennsylvania State University ranks first; and best schools for making an impact -- a list led by Wesleyan University.

Of the 200 schools in the book, 137 are private and 63 are public institutions. The average cost of attending for in-state schools receiving need-based aid is $12,972 a year. The average admission rate is 54 percent, with 13 schools admitting over 70 percent who apply.