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.
2026-06539 — Agency Information Collection Activities; Comment Request; Annual Report of Children in State Agency and Locally Operated Institutions for Neglected and Delinquent Children
The Department of Education wants to keep collecting yearly info about kids in state and local institutions for neglected or delinquent children, with no changes to the current form. This affects state agencies and local places that care for these kids, and they’re asking for public comments by April 3, 2026. There’s no new cost or extra paperwork, just a smooth extension to keep tracking important data.
2026-06491 — Agency Information Collection Activities; Submission to the Office of Management and Budget for Review and Approval; Comment Request; Demonstration Grants for Indian Children and Youth Program Grant Application Package (1894-0001)
The Department of Education wants to keep collecting info for the Demonstration Grants for Indian Children and Youth program without changing the current forms. This affects states, local groups, and tribes applying for these grants, helping them support Native kids and youth. You’ve got until May 4, 2026, to share your thoughts, and no new costs or changes are planned right now.
2026-06456 — Notice Announcing Educational Opportunity Centers Program Competition
The Department of Labor and Education are inviting groups to apply for grants to run Educational Opportunity Centers that help people get into college and understand money better. Applications are due by May 14, 2026, and winners can get up to $1.3 million a year to support their programs. This is a great chance for organizations to expand education access and help more students succeed!
2026-06436 — Title: Competition Announcement; Parent Information and Training Program
The Department of Education is offering grants for 2026 to support Parent Information and Training Centers that help families of individuals with disabilities. One new center will be funded in the Midwest region (Iowa, Kansas, Missouri, Montana, Nebraska, North Dakota, South Dakota, Wyoming). Interested groups must apply online by April 24, 2026, to get a chance at this funding.
2026-06438 — Proposed Waivers and Extensions of the Project Period With Funding for the American Indian Vocational Rehabilitation Services Program and the American Indian Vocational Rehabilitation Training and Technical Assistance Center
The Department of Education wants to give 43 American Indian Vocational Rehabilitation projects and one training center extra time and money beyond their usual 5-year limit, extending support through September 30, 2027. This means these programs can keep helping American Indian communities with job training and support without interruption. People have until May 4, 2026, to share their thoughts on this plan.
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