By the time he graduated from seminary in 2010, Matthew had taken out almost $100,000 in federal loans so he could become a rabbi and pursue his goal of tikkun olam, a Hebrew phase meaning "repair of the world."
After ordination at New York City's Hebrew Union College-Jewish Institute of Religion, Matthew secured a job at a large Reform temple in Boston. The pay was meager, amounting to "tens of thousands less than what I owe in loans," he recalled, but the job's duties matched his passions: engaging young Jews in the community, forging interfaith alliances throughout the city and taking up social justice projects.
As an employee of a registered nonprofit, Matthew (who declined to give his last name for this article) also had something else in mind: a relatively new federal law that offers loan forgiveness to nonprofit employees and others who work in "public service."
Part of the College Cost Reduction and Access Act of 2007, the law specified that as long as students took public service jobs at nonprofits and made on-time loan payments for 10 years, their remaining debt would be wiped out. Matthew calculated that for him this would work out to his paying $450 a month for a decade.
Over the four years since the law passed, seminaries across the country have conducted financial aid seminars explaining and publicizing this loan forgiveness program.
But last week, the Department of Education released guidelines outlining exactly who qualifies for loan forgiveness. It turns out that employees whose work is related to "religious instruction, worship services, or any form of proselytizing" don't fit the bill.
"It was like I was hit with a brick," said Matthew, who had thought he would qualify for loan forgiveness in 2020, some 20 years after he consolidated his loans and began an income-based payment program. "I have to radically shift my family's long-term planning."
In the small world of seminary training and professional religious jobs, the news that the public service loan forgiveness provision is not an option for religious workers has thrown a wrench in the plans of young pastors, rabbis, imams and other members a profession already known for low pay, long hours and high stress.
"If you think of Protestant clergy, they come out with four years of college and three years of seminary," said the Rev. Emily C. Heath, pastor at West Dover Congregational Church in Vermont. "Those can be some pretty high-debt six-figure loans. The majority of young pastors I know have loans," added Heath, who has joined an informal campaign to get the law changed.
"The new rules really came as a surprise to all of us," said Heather Jarvis, a financial aid consultant who has worked with thousands of students and has led financial aid classes at seminaries. "I have heard from clergy every day from all sorts of churches and synagogues who are very concerned."
When Congress passed the College Cost Reduction and Access Act in 2007, it indicated that people who took traditional public service jobs such as those in law enforcement, public schools, public interest law and emergency management, among others, would qualify for loan forgiveness. The law also stated that faculty at nonprofit universities and employees of 501(c)(3) organizations, which includes most houses of worship, would qualify.
Aware of the complicated history of church-state relations in the United States, Joe, a rabbinic student at Hebrew Union College-Jewish Institute of Religion in New York City (who also chose not to give his last name), thought it would be best to wait for more details.
When the Department of Education released regulations in 2008 and 2009, it explained that employees of 501(c)(3) nonprofits were eligible for loan forgiveness but that workers at nonprofits or private organizations who "engaged in religious activities" would not qualify. Many seminarians and financial consultants such as Jarvis interpreted this to mean employees of religious 501(c)(3) groups would still qualify.
That's when Joe, who had juggled three jobs during his first few years of seminary to cover expenses, slowed down his outside work and took out more loans.
But after last week's news, Joe, who had been weighing taking on a clergy role at a congregation, is now considering other work. "This has made it much more difficult to pursue that option," he said. Joe, 28, who is is now working toward earning a doctorate in history at Columbia University, is mulling work as a professor after reading the Education Department's latest rules.
Daren Briscoe, a Department of Education spokesman, said via email that "many employees at faith-based social service organizations will be eligible for the PSLF program. He added that the latest document "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 programs, the federal government does not subsidize explicitly religious activity."
Briscoe added that the department "plans to publish a technical amendment to address any ambiguity in the 2008 regulation."
Meanwhile, Joe has started a Facebook group to protest the rules, "Clergy serve the public too!"
"It's sad because the whole point of the program was to encourage people to pursue public service to help the needy," Joe said. "Clergy are the first responders. When someone is suffering, they are the first ones who people go to."
CLARIFICATION: This article has been updated to reflect the Department of Education's position that many employees of faith-based social service groups may qualify for loan forgiveness.