Education Fixes Confusing Loan Forgiveness Instructions Quietly
Published Date: 3/13/2026
Rule
Summary
The Department of Education fixed some confusing instructions in a previous rule about Public Service Loan Forgiveness for Direct Loan borrowers. These corrections don’t change the actual rules but make sure everything is clear and in the right place. The fix kicks in on July 1, 2026, so borrowers and loan servicers can stay on track without any money surprises.
Analyzed Economic Effects
4 provisions identified: 2 benefits, 2 costs, 0 mixed.
Employer Misconduct Can Stop PSLF Credit
Effective July 1, 2026, if your qualifying employer is later determined to have a “substantial illegal purpose” (examples listed in paragraph (b)(30) such as aiding certain immigration violations, supporting terrorism, child trafficking, or chemical or surgical mutilation of children), then no payments made for any month after that determination will count as qualifying payments for Public Service Loan Forgiveness (PSLF). This means months after the finding will not count toward PSLF eligibility.
Full-Time Work Defined for PSLF
For PSLF, “full-time” means working at least a 30-hour average per week during the period being certified, or working a minimum of 30 hours per week throughout a contractual or employment period of at least 8 months in a 12-month period (for example, elementary and secondary school teachers and professors are deemed full-time). For non-tenure-track teaching, the equivalent of 30 hours per week is calculated by multiplying each credit or contact hour taught per week by at least 3.35.
Which Repayment Plans Count for PSLF
The rule lists qualifying repayment plans for PSLF: an income-driven repayment plan under §685.209; the 10-year standard repayment plan under §685.208(b); the consolidation-loan standard 10-year repayment under §685.208(c); or (except for the alternative repayment plan) any other repayment plan if the monthly payment is not less than what would have been paid under the 10-year standard repayment plan.
Which Employers Qualify for PSLF
The rule defines qualifying employers for PSLF to include U.S.-based Federal, State, local, or Tribal government organizations (including the U.S. Armed Forces and National Guard), public child or family service agencies, organizations under Internal Revenue Code section 501(c)(3), Tribal colleges or universities, and certain nonprofits that provide a non-governmental public service (attested to by the employer). It also states qualifying employers do not include organizations that have a “substantial illegal purpose.”
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Key Dates
Related Federal Register Documents
2025-15665 — William D. Ford Federal Direct Loan (Direct Loan) Program
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.
2026-13178 — Agency Information Collection Activities; Comment Request; Revocation of Consent To Share Federal Tax Information Form
The Department of Education wants to keep using a form that lets people cancel their permission to share federal tax info. This extension won’t change the form but gives folks a chance to comment by August 31, 2026. If you’re involved with federal student aid or tax info sharing, this affects you—no new costs or big changes, just a smooth continuation.
2026-13179 — Agency Information Collection Activities; Submission to the Office of Management and Budget for Review and Approval; Comment Request; Joint Consolidation Loan Separation Application
The Department of Education is updating the form people use to split their joint student loan. This change affects borrowers with joint consolidation loans and aims to make the process clearer and easier. You’ve got until July 30, 2026, to share your thoughts, and about 20,000 folks use this form each year.
2026-12966 — Agency Information Collection Activities; Submission to the Office of Management and Budget for Review and Approval; Comment Request; William D. Ford Federal Direct Loan Program (Direct Loan Program) Promissory Notes and Related Forms
The Department of Education is updating the forms for the William D. Ford Federal Direct Loan Program, which affects students, schools, and loan servicers. They want your feedback by July 27, 2026, to make sure the forms are clear and easy to use without causing extra hassle. This update aims to keep the loan process smooth and efficient for over 12 million annual responses.
2026-12972 — Reopening or Extension of Application Deadline Dates; Applications for New Awards
The Department of Education may give extra time or reopen grant application deadlines for people affected by major disasters. This helps those in disaster-hit areas get a fair chance to apply for funding, usually adding up to five extra business days. These changes only affect eligible applicants in the disaster zones and could shift related review deadlines too.
2026-12857 — Agency Information Collection Activities; Submission to the Office of Management and Budget for Review and Approval; Comment Request; Grant Application Form for Project Objectives and Performance Measures Information
The Department of Education wants to keep using its current grant application form that helps track project goals and results—no changes this time! This affects private organizations applying for grants, with about 8,800 responses expected each year. You’ve got until July 27, 2026, to share your thoughts, so don’t miss your chance to weigh in on how easy and useful this form really is.
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