PSLF: Clergy & Religious Workers Qualify

Back in August 2020, the Department of Education issued Final Regulations, which allowed PSLF applicants to count their hours spent on religious activities (see our previous post, mostly the same as below). Now those regulations are effective today, July 1, 2021:

“The Department has removed proposed § 685.219(c)(4), which would have prohibited PSLF applicants from counting hours spent on religious instruction, worship, proselytizing, and fund raising towards the full-time work requirement of the PSLF program.”

We also see that the definition of Full-Time Employment has changed on the Department of Education’s website:

“If you are employed by a not-for-profit organization, time spent on religious instruction, worship services, or any form of proselytizing as a part of your job responsibilities may be counted toward meeting the full-time employment requirement” (emphasis ours).

And finally, the Employment Certification Form (PSLF Form) has removed all mentioning of “religious instruction, worship services, or any form of proselytizing,” which were formerly found on page 2 question 8 and page 5 under Employment Eligibility.

The Department of Education outlines its reasoning below:

Public Service Loan Forgiveness Program (§ 685.219)

Comments: The Department received many comments on the proposed changes to § 685.219 relating to the PSLF program. In particular, commenters were concerned about proposed § 685.219(c)(4), which would provide that time spent participating in religious instruction, worship services, or any form of proselytizing while employed by a non-profit organization under section 501(c)(3) of the Internal Revenue Code would not be included toward meeting the full-time requirement.

Many commenters asserted that both the original regulatory language and the proposed change violate RFRA, because the regulations force borrowers to choose between exercising their religion and obtaining a meaningful government benefit. Also, commenters stated that the proposed regulations would unlawfully continue to exclude those who are participating in religious exercise and speech from qualifying for the generally available benefit of loan forgiveness. Commenters believed that, under the proposed rules, borrowers could be compelled to work for secular organizations over religious organizations in order to obtain loan forgiveness. From a practical perspective, commenters noted that religious activities may be intertwined with secular work, making it difficult to clearly separate out the hours and creating uncertainty and confusion on the part of the applicants and employing organizations. These commenters indicated that religious activities should not be excluded in the calculation of work hours for PSLF.

Some commenters stated that the Establishment Clause does not require borrowers eligible for loan forgiveness to exclude religious activities from their full-time work hours. Commenters also contended that the proposed provision would raise a significant threat of entanglement under the Establishment Clause when the government tries to evaluate whether a religious organization’s employees are properly defining work that touches on religious education or worship.

Further, commenters asserted that because the proposed language is not the least restrictive means of advancing any government interest, the language also violates RFRA.

One commenter also raised concerns that the terms “religious instruction,” “worship services,” and “proselytizing” are not defined and are not workable. For example, the commenter argued that worship cannot be separated from the teaching of moral values, and that it is not clear whether proselytizing includes secular viewpoints. The commenter stated that use of these terms has the effect of excluding people engaged in religious speech. The commenter argued that it would be more appropriate to treat all applicants for PSLF equally.

Other commenters expressed concern that it would violate the Establishment Clause if borrowers received loan forgiveness to work on inherently religious activities. One commenter argued that the Department’s justification for this proposal misinterprets the decision in Trinity Lutheran and that RFRA does not apply to this situation in which the Government is not preventing the borrower from performing the desired religious activities and does not deny benefits to religious persons engaging in qualified work. These commenters urged the Department to maintain the proposed language as published in the NPRM.

Commenters stated that using RFRA to create a religious exemption for PSLF work requirements is at odds with the tailored approach required by RFRA, and that RFRA does not give the Department authority to adjudicate claims it anticipates might happen and create blanket exemptions. Instead, RFRA requires a “careful, individualized, and searching review.”

Many commenters encouraged the Department to adopt the proposed language or to maintain the current regulatory language.

Discussion: The Department is persuaded that the proposed regulations requiring borrowers to exclude work spent on religious activities from full-time work is not required by the Establishment Clause and may pose unnecessary burdens. The Establishment Clause does not require that borrowers work solely for secular organizations to obtain loan forgiveness. (11)

The Department also recognizes that there are practical difficulties associated with separating religious work from public service work, as the two may not always be cleanly divided. There would be burdens on both the borrowers in attempting to record the different time spent on religious activities and on the Department in overseeing such a restriction. Moreover, concerns about potentially overbroad interpretations of the religious activities that could not count toward full-time work could dissuade borrowers from working for religious organizations or pressure them to forgo the economic benefits that flow from loan forgiveness. And to the extent that the proposed language was interpreted broadly to disqualify from loan forgiveness individuals who hold particular views about the religious nature of their public service—for example, those who view their service as a form of proselytization even if it contains no explicit call to conversion—would raise Free Exercise or RFRA concerns. As a result, the Department has not included proposed § 685.219(c)(4) in the final regulations. The final regulations will set religious individuals and entities on equal footing with their secular counterparts by allowing such individuals and entities to qualify for the same aid already available to nonreligious individuals and entities.

The Department does not agree with commenters who argued that RFRA is not implicated by the Department’s current rules excluding religious individuals and entities from participation in generally available benefit programs. Nor does the Department agree with commenters who argued that the Department is using RFRA to create overly broad, blanket exceptions. The rule is designed to both correct existing RFRA violations under the current regulations and to prevent future violations. Congress has tasked the Department with the duty to ensure that the Department’s regulations do not substantially burden a person’s exercise of religion (absent a compelling government interest and a showing that the burden is the least restrictive means of furthering that interest). 42 U.S.C. 2000bb, et seq. This mandate, as previously discussed, applies to “all Federal law, and the implementation of that law, whether statutory or otherwise.” 42 U.S.C. 2000bb-3(a). Thus, the Department’s establishment of this regulation clearly falls under the mandate of RFRA.

Because the current regulations discriminate against religious groups and deny individuals the ability to participate in important government programs on the basis of their religious status, the current regulations likely amount to a substantial burden on those entities’ exercise of religion.

RFRA defines “religious exercise” as “any exercise of religion, whether or not compelled by, or central to, a system of religious belief.” 42 U.S.C. 2000bb-2(4) (citing 42 U.S.C. 2000cc-5). The current rules impose a “penalty” on these individuals’ free exercise of religion, Trinity Lutheran, 137 S. Ct. at 2021—which they engage in by becoming members of religious orders, attending religious institutions, participating in or working at religious organizations, among other ways—by requiring them to “choose between their religious beliefs and receiving a government benefit.” Id. at 2023 (quoting Locke, 540 U.S. at 720-21); see Sherbert v. Verner, 374 U.S. 398, 404 (1963) (finding a substantial burden where it was “apparent that appellant’s declared ineligibility for benefits derives solely from the practice of her religion,” forcing her “to choose between following the precepts of her religion and forfeiting benefits, on the one hand, and abandoning one of the precepts of her religion in order to accept work, on the other hand”); see also 42 U.S.C. 2000bb(b)(1) (“The purposes of this chapter are—(1) to restore the compelling interest test as set forth in Sherbert v. Verner, 374 U.S. 398 (1963) and Wisconsin v. Yoder, 406 U.S. 205 (1972) and to guarantee its application in all cases where free exercise of religion is substantially burdened . . . .”).

And the Department’s status-based restrictions are neither necessary to further a compelling government interest, nor are they the least restrictive means of furthering any such interest. Therefore, RFRA would require the Department to alleviate any such substantial burden.

Some commenters believe that the Department’s changes to eligibility requirements for certain aid would have the effect of advancing religion. The Department’s aid will not advance religion, nor do the Department’s changes require aid to be used for religious purposes. Rather, the Department’s aid will advance public service generally, by eliminating a condition on eligibility for loan forgiveness that might have deterred individuals from performing such volunteer work, and it will accommodate the religious exercise of those who seek to perform volunteer work for a religious organization. Importantly, the Department’s final regulations correct rules that singled out individuals employed by organizations that are engaged in religious activities for disfavored treatment.

Additionally, the Supreme Court has repudiated the suggestion, advanced by some commenters, that the Establishment Clause bars government aid from flowing from religiously neutral government programs to religious institutions. See, e.g., Mitchell v. Helms, 530 U.S. 793, 835 (plurality opinion) (overruling Wolman v. Walter, 433 U.S. 229 (1977) and Meek v. Pittenger, 421 U.S. 349 (1975)); id. at 837 (O’Connor, J., concurring in the judgment) (same); Agostini v. Felton, 521 U.S. 203, 235 (overruling Aguilar v. Felton, 473 U.S. 402 (1985) and School District of the City of Grand Rapids v. Ball, 473 U.S. 373 (1985)).

In addition, under the principle set forth in Zelman, a benefit program like PSLF need not exclude religious recipients to comply with the Establishment Clause where funding would only reach such recipients following the private choice of the individual using the benefit. See Zelman, 536 U.S. 639, 653-60 (2002). Likewise, in this case, the borrower receiving the benefit of PSLF under the regulation makes a private choice between different volunteer options in the community and does not create an Establishment Clause problem by choosing to volunteer with a religious entity that performs religious tasks. As a result of the intervening private choice of the borrower, “no imprimatur of state approval can be deemed to have been conferred on any particular religion, or on religion generally.” Zelman, 536 U.S. at 650 (internal citations, quotation marks omitted).

Although the current regulations do not raise an Establishment Clause problem, they do raise a Free Exercise Clause concern. In Trinity Lutheran, the Court reiterated that the Free Exercise Clause applies to government benefits and funding. The Court in that case rejected the State’s interest in “skating as far as possible from religious establishment concerns” as a basis for categorically excluding a religious organization from a generally available funding program. Id. at 2021. The Court applied “the most exacting scrutiny” to the government program, finding that it “expressly discriminate[d]” against an entity that would be otherwise eligible for the government grant but for that entity’s religious character. Id.

A materially similar fact pattern exists in the current regulations: But for the religious character of the public service organization that a borrower works for and the types of religious activities the organization performs, the borrower would have qualified for loan forgiveness under title IV. The benefit available under § 685.219 is generally available, except to borrowers who work for non-profit organizations that are engaged in religious activities. Such an exclusion is based on the religious status of an organization and, therefore, is unconstitutional. Some commenters argue that the Department errs in relying on Trinity Lutheran. They contend that, according to footnote 3 in the decision, Trinity Lutheran applies only to the narrow factual circumstance of a church-run school seeking to compete for a playground resurfacing grant.

As discussed above in the Department’s response to general comments on Faith-Based Entities, footnote 3 does not undermine the force of the reasoning in Trinity Lutheran and was only joined by four Justices. Trinity Lutheran, 137 S. Ct. at 2016.

Changes: The Department has removed proposed § 685.219(c)(4), which would have prohibited PSLF applicants from counting hours spent on religious instruction, worship, proselytizing, and fund raising towards the full-time work requirement of the PSLF program.

REMINDER: Be sure to check with your student loan servicer and the Department of Education for your own situation and updates! And remember to submit your Employer Certification Form.

Tagged with: , , ,
Posted in blog