Bush Administration Excommunicated Clergy and Religion Instructors from Student Loan Forgiveness Program

By Fred Lucas | February 17, 2012 | 2:22 PM EST

President George W. Bush, flanked by Sen. Ted Kennedy (D.-Mass.) and Rep. John Boehner (R.-Ohio), signed the No Child Left Behind law on Jan. 8, 2002. (AP Photo)

(CNSNews.com) - The U.S. Education Department under President George W. Bush issued a regulation on Oct. 23, 2008 effectively disqualifying clergy and religion instructors from a student-loan forgiveness program enacted to help people who had dedicated their lives to jobs in the service of others.

The regulation has drawn some attention in recent days because the Obama Education department issued a guideline on Jan. 31 reiterating the regulatory policy of the Bush administration.

The actual law, enacted in 2007, did not exclude clergy and religion instructors from the student loan forgiveness program.

The Public Service Loan Forgiveness Program was enacted as part of the College Cost Reduction and Access Act of 2007. The law was approved by Democrat-controlled Congress and signed by President George W. Bush.

Under the law, a person could be forgiven the balance of their student loan if they had made 10 years of payments (120 months) while working in a “public service job.” The law defined “public service job” as, among other things, a full-time job in such professions as law enforcement, public education, social work, public interest law services, “or at an organization that is described in section 501 (c )( 3) of the internal revenue code." Like other non-profits, churches and religious schools fall under 501(c )( 3) of the Internal Revenue Code.

There was no language anywhere in the law that someone engaging in religious services of any kind would be excluded from the loan-forgiveness provision.

On Oct. 23, 2008, the Bush Education Department, then led by Education Secretary Margaret Spellings issued a regulation implementing the law that did exclude people involved in religious activities.  Under the Bush regulation, a person would not qualify for loan forgiveness if they worked at “a business organized for profit, a labor union, a partisan political organization, or an organization engaged in religious activities, unless the qualifying activities are unrelated to religious instruction, worship services, or any form of proselytizing.”

Former Education Secretary Spellings declined to be interviewed by CNSNews.com for this story.

On Jan. 31, Under Secretary of Education Martha Kanter joined Rep. John Sarbanes (D-Md.) at the University of Maryland Baltimore to announce new efforts by the Department of Education for people to take advantage of the loan forgiveness program. At that time, the department released a new employment certification form for people who might seek loan forgiveness.

Some media outlets, including the Washington Post, flagged a provision on the form that said, “Generally, the type or nature of employment with the organization does not matter for PSLF purposes. However, if you work for a non-profit organization, your employment will not qualify for PSLF if your job duties are related to religious instruction, worship services, or any form of proselytizing.”

When CNSNews.com asked the Department Education about this language, the department repsoned that it merely clarified existing policy.

“The Department of Education released a form on January 31 detailing the kinds of public service work that would qualify individuals for Public Loan Service Loan Forgiveness (PSLF),” the department said in a statement CNSNews.com. “This form did not change existing Federal policy, but clarified that individuals working at religiously-affiliated non-profit organizations who perform at least 30 hours of non-religious activities are eligible for PSLF, and that, consistent with similar long standing [policies], the federal government does not subsidize explicit religious activity. The Department plans to publish a technical amendment to clarify any ambiguity in the 2008 regulation.”

While clergy working for a church or a teacher involved in “religious instruction” would not qualify for the loan forgiveness, a person working for Planned Parenthood or the Gay and Lesbian Alliance Against Defamation (GLAAD) would.

If not discriminatory, the regulation is likely unworkable, said Dan Aleshire, executive director of the Association of Theological Schools, which represents 250 of the nation’s Christian seminaries.

“The way the language is written, I think the Department of Education is going to have considerable difficulty in interpreting it and trying to apply it,” Aleshire told CNSNews.com. “Suppose someone is working full time in a church running its day care program. Maybe the person helps lead in worship periodically. Does the fact they say a prayer in Mass make them ineligible to participate in the program?”

Aleshire said there are also problems since the law enacted by Congress makes no distinction between one 501(c)(3) organization and another.

“Why would religion get a special category, but another 501(c)(3) doesn’t get a special category?” he said.

Aleshire said he does not necessarily see a big practical impact from this, and expects that most seminary graduates would be able to pay their loans off independently before 10 years. But he does not believe forgiving the student loans of people working as clergy or religion instructors would violate the First Amendment’s prohibition on Congress establishing a religion.

“It would not favor one religion, a Buddhist  monk, a Muslim imam and a Baptist minister could all claim it,” Aleshire said. “Theologically speaking, religion has proven to be a fundamental public good for society. Society seems to want to move religion from being moved from a public good to a private choice.”