ED Gains Expanded Authority Under Public Service Loan Forgiveness Program Final Rule

On Friday, Oct. 31, 2025, the Trump administration issued a final rule regarding Public Service Loan Forgiveness (PSLF) that gives the U.S. Department of Education (ED) expanded power to ban organizations from the program if their work is deemed to have a “substantial illegal purpose.” The new rule, which takes effect on July 1, 2026, only allows employers to be sanctioned for activities that occur after that date. Individuals can reapply for eligibility after 10 years or rejoin sooner if they follow a “corrective action plan” approved by the Education Secretary. The final rule has raised concerns among nonprofits, universities and student borrowers for giving ED too much power to bar organizations from the program and potentially leading to work shortages in high demand fields, such as medicine. Under the new rule, the Secretary will determine whether the “preponderance of the evidence” leans against the employer. Though documents indicate that a single violation of the law may not be grounds for expulsion, the determination ultimately comes down to the Secretary’s analysis.

AACOM submitted comments in response to ED’s proposed rule and comprehensive analysis of the final rule is forthcoming.