Key Changes for PSLF Borrowers

1. New Exclusion Criteria for Qualifying Employers

• The final rule excludes employers engaging in activities with a “substantial illegal purpose.” Those activities are:
  • Terrorism
  • Immigration violations
  • Child abuse (including certain medical procedures)
  • Illegal discrimination
  • State tort violations
• Borrowers employed by such organizations will no longer earn qualifying PSLF credit for service performed after the effective date of the employer’s disqualification.

2. Impact on Borrowers

• If your employer loses eligibility under the new rule, your PSLF qualifying months after the effective date of disqualification will not count toward forgiveness.
• You’ll need to move to employment with an eligible (lawful public service) employer to continue accumulating credit.

Key Changes for PSLF Employers

• ED will make a determination of disqualification based on the preponderance of the evidence; conclusive proof via court judgment, plea, or admission of wrongdoing 
• Employers will also be required to confirm no engagement in illegal activity; failure to certify will lead to disqualification unless corrected with an approved plan
• Employers found in violation could later regain eligibility in two ways:
  1.  After a 10-year disqualification period from the date of determination; or
  2. Upon approval of an ED–approved corrective action plan.