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18h ago

Education Department Proposes PSLF Limits Tied to Employers’ “Substantial Illegal Purpose”

A monthlong comment window runs through Sept. 17 as officials move to base future eligibility on employer conduct rather than a worker’s public-service role.

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Exterior view of the Lyndon Baines Johnson (LBJ) Department of Education Building, the Education Department (ED) headquarters in Washington, DC on June 24, 2022.
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Overview

  • The Notice of Proposed Rulemaking, published Aug. 18, implements a March directive from President Trump and opens public comments through Sept. 17.
  • Borrowers would lose future PSLF credit if their employer is found to pursue a “substantial illegal purpose,” with examples including violations of immigration law, certain gender-affirming care the department characterizes as “chemical castration or mutilation,” and acts of terrorism.
  • The department could deem employers ineligible based on court outcomes or its own preponderance-of-evidence determinations; organizations can appeal, but the process is not specified, and individual borrowers cannot request reconsideration.
  • The proposal is explicitly non-retroactive, protecting PSLF credit already earned, and it targets a potential effective date of July 1, 2026.
  • Officials note the changes may delay or prevent forgiveness for a subset of borrowers, while unions and higher-education groups warn of ideological targeting and signal likely legal challenges.