Overview
- The final regulation, released Oct. 30 and set for Federal Register publication on Oct. 31, takes effect July 1, 2026.
- Employers found to have a “substantial illegal purpose” will be disqualified, with listed triggers including aiding federal immigration-law violations, supporting terrorism or certain violence, specified gender-affirming care for minors, trafficking children across state lines, aiding illegal discrimination, and patterns of state-law violations.
- The department will apply a preponderance-of-the-evidence standard using sources such as court rulings and settlements, notify employers and affected borrowers, allow responses and appeals, and offer corrective-action pathways.
- Payments made before an ineligibility finding will continue to count toward forgiveness, but payments after a final determination will not; the agency says the rule is prospective and not retroactive.
- Democracy Forward, Protect Borrowers, and Student Defense said they will sue, while the administration argues the change protects taxpayers and refocuses PSLF on traditional public servants; roughly 9 million borrowers may be eligible for PSLF and over 1 million have received relief under recent program expansions.