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1h ago

Education Department Finalizes Rule to Bar Some Employers From PSLF Over ‘Illegal Purpose’

The measure empowers the education secretary to disqualify employers on a preponderance-of-evidence standard with sanctions applying only to conduct after July 1, 2026.

FILE - The U.S. Department of Education building is seen in Washington, on Nov. 18, 2024. (AP Photo/Jose Luis Magana, File)
Secretary of Education Linda McMahon testifies in front of a congressional committee in May.
U.S. President Donald Trump speaks to members of the media on board Air Force One en route to the U.S., October 30, 2025. REUTERS/Evelyn Hockstein
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Overview

  • The rule allows excluding government and nonprofit employers from Public Service Loan Forgiveness if their activities are deemed to have a substantial illegal purpose.
  • It specifies disqualifying conduct including trafficking, aiding violations of federal immigration laws, supporting terrorism, and what it defines as 'chemical castration' through hormone therapy or puberty blockers for minors.
  • Employers can be barred following court findings or guilty settlements, or through an independent determination by the secretary based on the preponderance of the evidence.
  • The policy takes effect in July 2026, and organizations can be sanctioned only for activities occurring on or after July 1, 2026.
  • The administration projects fewer than 10 employer exclusions per year and includes notice, a chance to respond, and paths to reapply or undertake corrective action, as professional and nonprofit groups warn of politicization and workforce impacts.