Proposed PSLF Rules Bar Forgiveness for Illegal Employer Workers
Published Date: 8/18/2025
Proposed Rule
Summary
The government wants to change the rules for the Public Service Loan Forgiveness program to stop people working for shady employers from getting loan forgiveness. This means if your job is with an organization involved in serious illegal activities, you won’t qualify for loan help anymore. These changes protect taxpayers and make sure the program is fair, coming soon to keep things on the up and up.
Analyzed Economic Effects
1 provisions identified: 0 benefits, 1 costs, 0 mixed.
PSLF Excludes Employees of Illegal Employers
If you have federal student loans and work for an organization that engages in activities that have a "substantial illegal purpose," you would be excluded from the Public Service Loan Forgiveness (PSLF) program under the proposed amendment to 34 CFR 685.219. The change is intended to prevent taxpayer-funded PSLF benefits from being provided to employees of such organizations and to improve program administration.
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