Recommended Free Tools
The 2025 rule that would have let the Education Department disqualify some public-service employers from Public Service Loan Forgiveness (PSLF) was vacated by a federal court before its planned effective date. The Department said on September 22, 2026, that it was removing the related employer attestation from the PSLF form. That does not eliminate all PSLF risks: separate 2026 repayment-plan changes may affect whether payments count for some borrowers, depending on loan dates, loan type and consolidation history.
As of October 4, 2026, borrowers should distinguish the blocked employer rule from the repayment rules that remain relevant. Check current Department of Education guidance before changing repayment plans or consolidating loans.
What happened to the employer-disqualification rule?
On March 7, 2025, President Donald Trump signed Executive Order 14235, “Restoring Public Service Loan Forgiveness.” It directed the Department of Education to propose excluding organizations with a “substantial illegal purpose” from PSLF. The order stated: “Accordingly, it is the policy of my Administration that individuals employed by organizations whose activities have a substantial illegal purpose shall not be eligible for public service loan forgiveness.” That was the administration’s stated policy; it is not the current legal test for a borrower’s employer.
The Department published a final rule on October 31, 2025. As written, it would have allowed the Department to determine that certain employers no longer qualified, ending future PSLF credit for borrowers employed there after a disqualification determination. The rule identified categories of conduct it proposed treating as a substantial illegal purpose, including aiding or abetting certain immigration-law violations, supporting terrorism, certain child-trafficking or medical conduct, patterns of illegal discrimination, and patterns of specified state-law violations. Those descriptions concern the vacated rule, not a current borrower eligibility test.
The Tool Desk
Outbyte PC Repair FREERepair Windows errors before they cause bigger problemsFix Now →Outbyte Driver Updater FREEFix the driver behind crashes, sound loss and screen glitchesFind Drivers →#1 Best Overall
On June 30, 2026, the day before the rule was scheduled to take effect, U.S. District Judge Amir H. Ali granted summary judgment to the plaintiffs and vacated it. The court concluded that the rule exceeded the Secretary of Education’s authority under the Higher Education Act. In its opinion, the court said: “The language does not suggest—let alone say—that the Secretary can pick and choose among section 501(c)(3) organizations. Yet that’s what the challenged rule does.”
On September 22, 2026, the Department said it was removing the employer attestation from the PSLF and TEPSLF form to comply with the court order. The notice said no other form changes had been made at that time. NASFAA reported on August 28, 2026, that the Department had appealed the D.C. decision to the First Circuit and that the vacatur remained in effect while the appeal was pending. The Department’s September notice still refers to complying with the court order; it does not announce a later appellate ruling or stay.
Why the official regulatory text may look different
The live Electronic Code of Federal Regulations page, current through October 1, 2026, still displays the substantial-illegal-purpose provisions from the 2025 final rule. That text conflicts with the later court order and the Department’s September 22 notice that it is removing the employer attestation. Its presence in the online codification is not proof that the vacated provisions are enforceable. For the Department’s current implementation, rely on its latest PSLF form and guidance rather than treating the lingering text as a new eligibility screen.
What PSLF still requires
PSLF can forgive the remaining balance on eligible Direct Loans after a borrower satisfies the program’s requirements. Under the current regulation, qualifying months must meet several conditions:
Free tools Windows power users keep installed
One-click scans. No signup required.
Rank #3
- Used Book in Good Condition
- The borrower must make 120 qualifying monthly payments after October 1, 2007.
- The borrower must have qualifying full-time employment during the months being credited and when forgiveness is requested.
- The borrower must not be in default on the loan when forgiveness is requested.
- The loan and repayment plan must qualify. Not every federal loan or payment plan necessarily does.
Qualifying employers include U.S. federal, state, local and Tribal government organizations; qualifying 501(c)(3) organizations; and some other nonprofit public-service organizations. The regulation generally defines full-time work as an average of at least 30 hours per week.
The Department’s PSLF/TEPSLF certification and application form records employment and payment progress. The Department encourages borrowers to certify employment annually, and borrowers must submit the form when they reach 120 qualifying months to apply for forgiveness. Employer eligibility under these ordinary program rules remains relevant even though the 2025 disqualification rule was vacated.
How the separate 2026 repayment changes could affect PSLF
The 2026 federal loan regulations implement changes enacted in Public Law 119-21. They establish a Repayment Assistance Plan (RAP) and a Tiered Standard plan and change the availability of older repayment plans. These repayment changes are separate from the vacated employer rule: they concern whether a borrower’s particular plan and loan history allow payments to count, not a new test for disqualifying public-service employers.
The plan options depend on when the loan was made, its type and, in some cases, consolidation history. The regulations list income-driven repayment plans, the 10-year Standard plan, certain plans with payments at least as large as the 10-year Standard amount, an ICR transition provision for qualifying payments received by June 30, 2028, and RAP. That list does not mean every plan is available to every borrower or loan. Tiered Standard is not a qualifying PSLF plan.
Best Value
Parent PLUS borrowers
Parent PLUS borrowers should not assume either that PSLF is unavailable to all of them or that all of their payments will qualify. The final regulations preserve a PSLF route for some Parent PLUS borrowers only when timing and consolidation conditions are met. Newer Parent PLUS borrowing may have narrower plan options. Because the result turns on the borrower’s exact loan dates and consolidation history, confirm the applicable plan with current Federal Student Aid guidance before consolidating or switching.
Compare the two policy threads
| Issue | Status as of October 4, 2026 | What borrowers should check |
|---|---|---|
| 2025 employer-disqualification rule | Vacated June 30, 2026, before its scheduled July 1 effective date; the Department said September 22 that it was removing the related attestation. | Ordinary employer eligibility and employment certification still apply. Do not treat the vacated rule’s conduct categories as a current borrower test. |
| 2026 repayment-plan changes | Final regulations establish RAP and Tiered Standard and change availability of older plans. Plan eligibility depends on loan type and timing. | Verify that the specific plan qualifies for PSLF before changing plans. |
| Loans made before or on versus after July 1, 2026 | The rules distinguish loan cohorts; the consequences also depend on loan type and consolidation history. | Check the dates of each loan and applicable Department guidance rather than relying on a general rule for all borrowers. |
| Parent PLUS loans | Some borrowers may retain a PSLF route if timing and consolidation conditions are satisfied; options may be narrower for new Parent PLUS borrowers. | Confirm eligibility for the specific loan and plan before consolidating or switching. |
Practical steps for current and prospective PSLF borrowers
- Check your loans. Confirm which are eligible Direct Loans, note when each was made, and identify any Parent PLUS or consolidation loans.
- Check your repayment plan before making a change. Use current Department of Education or Federal Student Aid guidance to confirm whether your plan qualifies for PSLF for your loan cohort. Do not assume a plan qualifies just because it is a federal repayment plan.
- Keep employment and payment records. Use the Department’s PSLF/TEPSLF form to certify qualifying employment and track progress; the Department encourages annual certification.
- Apply when you reach 120 qualifying months. Submit the PSLF form to request forgiveness, and make sure the employment and loan requirements are met when you apply.
- Recheck official guidance if the appeal or form status changes. The court vacated the employer rule, but the case was reported on appeal, and the eCFR text had not yet caught up with the Department’s stated form change as of the dates above.
What the reported numbers do—and do not—show
The Education Department reported that 1,000,400 borrowers had received PSLF through September 25, 2025. It rounded the figures to the nearest hundred and noted data timing and cleaning caveats. The Department reported a weighted average of $75,900 forgiven among those borrowers; that is not a typical or guaranteed award for an individual borrower.
The Department also estimated $1.616 billion in savings across the scoring period from the employer-eligibility rule. That was an estimate associated with the rule later vacated by the court, not realized savings or a measure of current policy.
Quick Recap
Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.
