Overview
- The rule narrows Public Service Loan Forgiveness by allowing the education secretary to deem employers ineligible if they have a “substantial illegal purpose.”
- Examples of disqualifying conduct include aiding federal immigration violations, supporting terrorism, providing gender‑affirming care for minors in violation of law, trafficking children across states, and patterns of illegal discrimination.
- Determinations apply to employers, not individual workers, and the policy provides notice, an opportunity to rebut, and an appeals process; prior credited payments generally remain, but future payments won’t count if an employer is later barred.
- The department says fewer than 10 employers a year would be affected, a projection critics dispute as too vague and susceptible to ideological targeting.
- The change implements a March executive order from President Trump after a failed negotiated‑rulemaking effort, and legal groups including Democracy Forward, Protect Borrowers, and Student Defense say lawsuits are imminent.