U.S. Supreme Court Student Debt Rulings Leave Public Service Loan Forgiveness Unchanged

Last Friday, the U.S. Supreme Court issued an opinion in the Biden v. Nebraska case holding that a pandemic-era law that gave the U.S. Department of Education (DOE) flexibility to “waive or modify” student loan provisions during a national emergency doesn’t give DOE the authority to cancel student debt. As a result, the Biden Administration cannot move forward with its plan to cancel up to $10,000 of student debt per borrower and up to $20,000 in student debt per borrower with a Pell Grant. Many nonprofit employees, and many people who receive services from nonprofits, would have benefitted from this debt cancellation proposal. In light of the Court’s decision, the Biden Administration has indicated that it will try other regulatory or administrative approaches to reduce student debt.

While some nonprofit employees will be disappointed by the Court’s decision, they should note that the ruling has no impact on the Public Student Loan Forgiveness (PSLF) program, which provides for student loan forgiveness (separate from the Biden Administration’s debt cancellation proposal) for borrowers who work for charitable nonprofits for 10 years while paying off their student loans. Unlike the $10,000 debt cancellation proposal, a federal statute expressly authorizes the loan forgiveness in PSLF. The National Council of Nonprofits has posted a helpful analysis of the implications of the student debt court decision (and a second related case that the Court decided last Friday) for nonprofit employees.

Let Us Know: Does Your Nonprofit Have Questions About New Workplace Training Law?

Last week, legislators voted to override Governor Cooper’s veto of a bill (S.364) that will prohibit any “State employee training program” from covering 13 specific topics related to race and gender equity. The prohibited topics are:

1. One race or sex is inherently superior to another race or sex.
2. An individual, solely by virtue of his or her race or sex, is inherently racist, sexist, or oppressive.
3. An individual should be discriminated against or receive adverse treatment solely or partly because of his or her race or sex.
4. An individual's moral character is necessarily determined by his or her race or sex.
5. An individual, solely by virtue of his or her race or sex, bears responsibility for actions committed in the past by other members of the same race or sex.
6. Any individual, solely by virtue of his or her race or sex, should feel discomfort, guilt, anguish, or any other form of psychological distress.
7. A meritocracy is inherently racist or sexist.
8. The United States was created by members of a particular race or sex for the purpose of oppressing members of another race or sex.
9. The United States government should be violently overthrown.
10. Particular character traits, values, moral or ethical codes, privileges, or beliefs should be ascribed to a race or sex or to an individual because of the individual's race or sex.
11. The rule of law does not exist, but instead is a series of power relationships and struggles among racial or other groups.
12. All Americans are not created equal and are not endowed by their Creator with certain unalienable rights, including life, liberty, and the pursuit of happiness.
13. Governments should deny to any person within the government's jurisdiction the equal protection of the law.

The new law takes effect on December 1, 2023. The law does not prohibit nonprofits – including those with state grants and contracts – from offering workplace training for their own staff on any topics. However, depending on how the law is interpreted, it could limit some nonprofits’ ability to offer certain types of training on topics related to equity, diversity, and inclusion to state agencies or state employees.

The Center is seeking guidance from state officials on exactly how this law would apply to training offered by nonprofits. Specifically, the Center is seeking guidance on:

1. What types of training offered by nonprofits would constitute a part of a “State employee training program” (e.g., whether a nonprofit training would be covered by the law if any state employee attended or whether a nonprofit would need to contract with a state agency to provide a training for all or a portion of the agency’s staff for the nonprofit training to be covered by the law); and 
2. Whether any topics that are commonly covered in nonprofit equity, diversity and inclusion training would fall within the scope of the 13 prohibited topics.

Let us know if your nonprofit offers training to state agencies or state employees and/or if your nonprofit offers training on topics that could potentially fall within one or more of the 13 topics. Your input may be helpful in getting guidance that could minimize the impact of the new law on nonprofit training programs. The Center will not share your nonprofit’s name or other identifying information unless you would like us to do so.

FY2023-24 Begins Without State Budget in Place

The state began its new fiscal year last Saturday without a state budget in place. Legislative leaders had hoped to have the budget for FY2023-25 (H.B. 259) in place by now, but they are still negotiating details of individual income tax rate cuts and how to spend billions of dollars in savings reserve funds. With legislators taking a break this week, it is unlikely that a final budget will be in place for at least a few more weeks.

Unlike with the federal government, the failure to pass a state budget on time doesn’t cause parts of state government to shut down. Under state law, spending levels will continue in place at current levels until a new state budget becomes law. Even without the threat of a government shutdown, legislators and Governor Roy Cooper have two reasons to try to come to agreement on a new state budget soon:

1. Medicaid expansion in North Carolina cannot begin until a new state budget is in place; and
2. Without a new state budget, legislators cannot make adjustments to existing spending levels to account for inflation and new or changing needs in communities, and legislators cannot make changes to state tax laws.

To help your nonprofit better understand the differences between the two competing versions of the state budget, the Center has prepared an analysis of the nonprofit provisions and appropriations in the House and Senate budgets and a tutorial video on the state budget.

Center Accepting Applicants for President & CEO Role

With Jeanne Tedrow’s recent retirement announcement, the Center is accepting applications for the position of President & CEO through July 14. Take a minute to read the position profile and share with colleagues who may be interested – or apply for the position yourself.

Second Quarter Lobbying Reports Due by July 24

Nonprofits that are registered as lobbyist principals (and their staff or contractors who were registered as lobbyists) must file their second quarterly reports of 2023 with the Secretary of State Lobbying Compliance Division by July 24. All reports must be filed electronically. To help you understand the basics of state lobbying laws affecting nonprofits, check out the Center's summary of NC lobbying laws for nonprofits.

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Nonprofit Policy Update is North Carolina Center for Nonprofits' weekly newsletter of state and federal policy issues that affect all 501(c)(3) nonprofits. Learn about the Center's public policy priorities and agenda, or contact David Heinen, Vice President for Public Policy and Advocacy, for more information.