Academy considers next steps after unfavorable PSLF program final rule

“This rule will severely affect some of our members and have an immediate negative effect on the primary care physician pathway, and we’re working on next steps,” said David Tully, the Academy’s vice president of Government Relations.

“A few of the final rule’s provisions offer limited relief, such as retaining previously earned PSLF program credits and potential flexibility in employer classification, but we expect to keep pushing against this policy,” he added.

Court challenges could slow rule’s implementation

“As we expected, lawsuits against this rule are already being filed,” Tully said, adding that the Academy may file “friend of the court” briefs with one or more such lawsuits.

Reacting to the rule as proposed, the Academy and other stakeholders pointed to what may become a basis for legal challenges: whether the Department of Education has the authority to enforce the rule’s “substantial illegal purpose” criterion.

“Only Congress has the authority to substantively alter PSLF eligibility criteria,” the AAFP said in its letter on the proposed rule. “The department’s effort to redefine qualifying employment through regulation exceeds its delegated authority and would set a concerning precedent.”

Student loans and other financial assistance—including, since the program’s 2007 inception, PSLF—are governed by Title IV of the Higher Education Act of 1965. The AAFP argued that the rule’s push beyond the statute’s boundaries “could destabilize the PSLF program and jeopardize access to loan forgiveness for physicians serving in public service roles.”

PSLF final rule implications for the primary care workforce

• The final rule says the education department “may consider organizations that share the same identification number or other unique identifier to be separate entities if the organization is operating separately and distinctly from another entity with the same identification number.” This departure from the proposed rule leaves a potential allowance for large health care systems to continue PSLF program participation even when part of that system is ruled ineligible.
• The rule requires advance notification to any borrower whose employer is “at risk of becoming or becomes ineligible” to participate in the PSLF program or regains PSLF program eligibility. This offers more transparency than the rule as proposed.
• The rule adds further qualifiers to its proposed definition of “substantial illegal purpose” as criteria for disqualifying employers’ PSLF program eligibility. The Academy objected to the proposed definition’s broadness; the final rule widens rather than clarifies this definition.
• The rule finalizes a PSLF program disqualification process that includes no recourse for individual borrowers whose employer is deemed ineligible.
• The rule clarifies that if an employer is deemed ineligible, borrowers will retain credit for any PSLF payments made prior to the employer's determination of ineligibility.

How AAFP members can advocate to support the PSLF program

Use the Academy’s Speak Out tool to urge that your members of Congress pass legislation preserving the PSLF program.

Join the AAFP’s Advocacy Ambassadors program, which equips members with tools and training to start building relationships with elected officials.

Get involved with your state’s AAFP chapter to advocate for state-level medical loan-forgiveness programs.