Final PSLF Eligibility Restrictions Move Forward For Comment

A new rule from the Department of Education could reshape the Public Service Loan Forgiveness program (PSLF) by redefining which employers qualify.

The new rule, published today in the Federal Register (PDF File), would allow the Secretary of Education to block PSLF eligibility for organizations determined to have a “substantial illegal purpose.” The definition covers a wide range of activities, from providing medical care to transgender minors to allegedly violating immigration laws or engaging in (or even prohibiting to stop) certain protests.

The rule, slated to take effect July 1, 2026, would not strip existing PSLF participants of past qualifying payments. However, future payments would stop counting if an employer is disqualified under the new criteria.