Overview

• The proposal’s draft defines “illegal activities” to include aiding federal immigration law violations, supporting designated terrorist organizations, Civil Rights Act breaches and gender-affirming care for minors.
• It would allow the education secretary to strip Public Service Loan Forgiveness eligibility from employers without requiring criminal convictions or legal settlements.
• Advocates warn the criteria could be used as a political tool to punish organizations serving immigrants and transgender youth.
• Public servants at hospitals, nonprofits and government agencies risk losing progress toward loan cancellation and may need to change jobs or forfeit relief.
• The rule opened for public comment on July 7 and is slated for finalization by July 2026 before taking effect.