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
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