Overview
- The final regulation amends the definition of a qualifying Public Service Loan Forgiveness employer to exclude organizations the department finds have a substantial illegal purpose.
- Listed examples include aiding illegal immigration, supporting terrorism, trafficking, patterns of illegal discrimination, and gender‑affirming care for minors described as “chemical castration.”
- Employers can be barred based on a preponderance‑of‑the‑evidence determination by the secretary, with notice, a chance to rebut, appeal rights, and the ability to requalify after 10 years or via an approved corrective plan.
- The rule applies prospectively to conduct on or after July 1, 2026; prior qualifying payments remain credited, but future payments will not count if an employer is later disqualified.
- The department has not named specific targets and estimates fewer than 10 organizations would be barred annually, while advocacy groups and professional associations say they will sue and warn of recruitment impacts for public‑service roles.