Public Service Loan Forgiveness restricted for employers deemed to have a 'substantial illegal purpose'
Enacted8/10
Federal · Department of Education final rule, 34 CFR 685.219 (Oct. 31, 2025) · Oct 31, 2025
Impact 8/10
The Department of Education finalized a rule on October 31, 2025, effective July 1, 2026, allowing the Secretary to strip PSLF eligibility from employers found by a preponderance of the evidence to engage in activities with a substantial illegal purpose, including aiding violations of federal immigration law, supporting terrorism, and what the rule terms chemical or surgical castration or mutilation of children. Nonprofit, legal aid, and higher education groups warn the standard lets the administration disqualify organizations for political reasons. No dollar cap on PSLF forgiveness was enacted.
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Sources
✓ Verified against primary sources 2026-08-16