PSLF Employer Rule Vacated: What Changed on the Certification Form

If you have been keeping half an eye on Public Service Loan Forgiveness news over the past year, you may have picked up a fragment of this story without the full arc: a new rule about employers, a lawsuit, a form that changed. Here is the whole sequence, in order, sourced to the Federal Register and the court dockets themselves rather than to secondhand summaries.

The short answer: On October 31, 2025, the Department of Education published a final rule (90 FR 48966) that would have let the Secretary of Education strip an employer of PSLF eligibility if the employer engaged in activity with a “substantial illegal purpose,” as defined in a new set of categories added to 34 CFR 685.219. The rule was scheduled to take effect July 1, 2026. It never got there. On June 30, 2026, one day before the effective date, two separate federal courts vacated it. The Department of Education appealed both rulings on August 27, 2026, and as of late September 2026 it has confirmed, in its own Federal Register filing, that it removed the related attestation from the PSLF certification form to comply with the court orders — and that “no other changes have been made at this time.”

Where this rule came from

The rule traces back to Executive Order 14235, “Restoring Public Service Loan Forgiveness,” signed March 7, 2025, which directed the Department of Education to revise PSLF eligibility criteria. ED published a proposed version of the rule on August 18, 2025, drawing 13,989 public comments during the comment period, according to the final rule’s own preamble. The final version, “William D. Ford Federal Direct Loan (Direct Loan) Program,” was published October 31, 2025, at 90 FR 48966, with an effective date of July 1, 2026. A purely technical correction followed on March 13, 2026 (91 FR 12302), which by its own text fixed only how two paragraphs were slotted into the Code of Federal Regulations — “No changes to the regulatory text itself are necessary; the correction only addresses errors in the placement on that text.”

What the rule actually said

The rule’s operative language sits in 34 CFR 685.219(b)(30), which defines “substantial illegal purpose” as engaging in any of six categories of conduct:

• Aiding or abetting violations of 8 U.S.C. 1325 or other federal immigration laws
• Supporting terrorism, including facilitating funding to organizations designated as Foreign Terrorist Organizations, or engaging in violence meant to obstruct or influence federal government policy
• Engaging in the chemical or surgical castration or mutilation of children in violation of federal or state law
• Trafficking children across state lines for purposes of emancipation from their lawful parents, in violation of federal or state law
• Engaging in a pattern of aiding and abetting illegal discrimination
• Engaging in a pattern of violating specified state laws (trespassing, disorderly conduct, public nuisance, vandalism, or obstruction of highways, where a final state-court judgment exists)

A companion amendment to 34 CFR 685.219(b)(27), the “qualifying employer” definition, added a new exclusion: a qualifying employer no longer included “organizations that engage in activities such that they have a substantial illegal purpose, as defined in this section.”

The rule did not let ED make that call casually. Under 34 CFR 685.219(h), the Secretary had to determine “by a preponderance of the evidence, and after notice and opportunity to respond” — a process the regulation calls the “employer reconsideration process,” spelled out at 34 CFR 685.219(i) — that an employer had engaged in one of those six categories on or after July 1, 2026. The regulation treated three things as conclusive evidence on their own: a final state or federal court judgment, a guilty plea or plea of nolo contendere, or a settlement that included an admission by the employer. It also carved out an explicit limit: nothing in the rule could be used to find an employer had a substantial illegal purpose “based upon the employer or its employees exercising their First Amendment protected rights, or any other rights protected under the Constitution.”

The consequence for a flagged employer was steep but not necessarily permanent. Under 34 CFR 685.219(j), an organization that lost eligibility could regain it after 10 years, or sooner, if the Secretary approved a corrective action plan that included a certification, a report on the employer’s compliance controls, and any other conditions ED imposed.

For borrowers, the rule’s payment-counting mechanics mattered as much as the employer test itself. Under 34 CFR 685.219(c)(4), “no payment shall be credited as a qualifying payment for any month subsequent to a determination that a qualifying employer engaged in activities enumerated in paragraph (b)(30).” The preamble was explicit about the flip side: “Borrowers will receive full credit for work performed until the effective date of the Secretary’s determination.” In other words, the rule was written to be forward-looking only — work done before a disqualifying determination would still count, and only months after the determination would stop accruing. If you are trying to understand how PSLF counts a working week at all, independent of this rule, our explainer on how PSLF counts full-time hours covers that separate mechanic.

One more detail worth knowing: a borrower could not request reconsideration of the employer’s own loss of status, though the regulation required borrowers be notified when their employer’s status was at risk or confirmed to have changed.

The court decisions

Three lawsuits challenged the October 2025 rule before it ever took effect, all filed in November 2025 and all raising Administrative Procedure Act claims: Robert F. Kennedy Center for Justice and Human Rights v. McMahon in the U.S. District Court for the District of Columbia (Judge Amir H. Ali), and two related cases in the U.S. District Court for the District of Massachusetts before Judge Myong J. Joun — National Council of Nonprofits v. McMahon and Commonwealth of Massachusetts v. U.S. Department of Education, which were consolidated.

Both courts ruled on the same day, June 30, 2026, one day before the rule was due to take effect. In the D.C. case, Judge Ali granted the plaintiffs’ motion for summary judgment and denied the government’s cross-motion, ordering: “The final rule, William D. Ford Federal Direct Loan (Direct Loan) Program, 90 Fed. Reg. 48966 (Oct. 31, 2025), is vacated.” In the Massachusetts case, Judge Joun went further on the merits, holding that “the Final Rule is contrary to law and promulgated in excess of statutory authority, is arbitrary and capricious, and violates the First Amendment,” and set it aside as unlawful.

The Department of Education, along with Secretary Linda McMahon, appealed both decisions on August 27, 2026 — the D.C. case to the D.C. Circuit (Case No. 26-5308), and the Massachusetts case to the First Circuit (Case No. 26-1973). Both appeals remain pending. No motion for a stay pending appeal has turned up in either district court’s docket, which lines up with what the Department of Education has said publicly about its own compliance posture, described below.

What ED has done since the vacatur

The clearest, most recent word from the Department of Education on where things stand came in a September 22, 2026 Federal Register notice (91 FR 60119), filed as part of the routine paperwork process for renewing the PSLF Certification and Application form with the Office of Management and Budget. ED wrote:

“As explained in the Final Regulations published on October 31, 2025 (90 FR 48966), 34 CFR 685.219(i) required an update to the approved Public Service Loan Forgiveness Certification and Application, OMB #1845-0110… a revision to the form was made to include the addition of an attestation statement, under penalty of perjury, that the employer has not engaged in any activity that has a substantial illegal purpose on or after July 1, 2026. On Tuesday, June 30, 2026, a Federal judge vacated the rule; one day prior to the rule becoming effective. The Department is now removing the attestation from the PSLF form in order to comply with the court order. No other changes have been made at this time.”

That is the most direct evidence available of what borrowers and employers can expect right now: the attestation is coming off the form, and ED describes no other changes to the certification and application process as a result of this rule. We also found no record of ED having made a public determination against any specific employer under the substantial-illegal-purpose standard — which is not surprising, given the rule never survived to its effective date, but is worth stating plainly rather than assuming.

What borrowers should do now

Given all of that, the practical guidance is simple: keep certifying your employment the way you always have. There is no new form field to fill out, no employer test to worry your nonprofit or government employer will suddenly fail, and no evidence that any employer has actually been found to have a substantial illegal purpose under this rule. If you are separately working through PSLF Buyback to get retroactive credit for months that were not counted at the time, that process is unrelated to this rule and unaffected by it — see our explainer on how PSLF Buyback works. And if your qualifying payment count depends on loans you consolidated, the vacated rule does not change how PSLF counts a weighted average of payments after consolidation; that is a separate calculation entirely.

An open question: does the May 2026 rewrite of § 685.219 survive?

Here is where the record gets genuinely unresolved, and it is worth being upfront about rather than guessing. Separately from the vacated October 2025 rule, the Department of Education published a much larger final rule on May 1, 2026 — “Reimagining and Improving Student Education—Federal Student Loan Program Final Regulations” (91 FR 23768–23901) — that rewrote 34 CFR 685.219 from scratch, with an instruction to “amend § 685.219 by revising to read as follows.” In doing so, it reproduced the same substantial-illegal-purpose definitions, the preponderance-of-the-evidence standard, and the 10-year/corrective-action-plan framework, verbatim, inside its own rewritten section. That same May 2026 rule also added the Repayment Assistance Plan (RAP) as a qualifying repayment plan for PSLF — a provision that was not part of the rule the courts vacated and that neither order addresses; see our piece on whether RAP counts toward PSLF for what that means for your 120-payment count.

As of the most recent eCFR issuance we checked (September 24, 2026), the text of 34 CFR 685.219 — including the substantial-illegal-purpose definitions and standard — is still present in the Code of Federal Regulations, and the authority citation attached to it points to the May 2026 rule, not the vacated October 2025 rule. The two June 30, 2026 court orders, by their own text, vacated specifically “the final rule…90 Fed. Reg. 48966 (Oct. 31, 2025).” Neither order refers to the May 2026 rule. Whether the May 2026 rule’s independent re-enactment of the same language is legally untouched by those vacaturs, or should be read as invalid for the same reasons the courts gave, is a question we did not find a court or agency source resolving directly. ED’s own September 22, 2026 statement that it removed the attestation “to comply with the court order” and made “no other changes” suggests the agency, in practice, is not currently enforcing the substantial-illegal-purpose standard against anyone — but that is a statement about current practice, not a legal ruling on the May 2026 text. Treat this as an open question rather than a settled one until a court or ED addresses it directly.

What to watch

Two appeals are the thing to track. The Department of Education’s appeal of the D.D.C. vacatur is pending before the D.C. Circuit as Case No. 26-5308. Its appeal of the Massachusetts vacatur is pending before the First Circuit as Case No. 26-1973. Either court could reverse, affirm, or send the case back for further proceedings, and any ruling would likely also speak to what happens with the May 2026 rule’s parallel language. Until one of those courts rules, or ED says more than it has so far, the safest description of where things stand is the one ED itself gave in September: the attestation is off the form, and nothing else has changed.

Sources

• Final rule, William D. Ford Federal Direct Loan (Direct Loan) Program, 90 FR 48966 (Oct. 31, 2025): https://www.federalregister.gov/documents/2025/10/31/2025-19729/william-d-ford-federal-direct-loan-direct-loan-program
• eCFR, 34 CFR 685.219, full-text version history: https://www.ecfr.gov/api/versioner/v1/full/2026-09-24/title-34.xml?part=685
• Agency Information Collection Activities; PSLF & TEPSLF Certification and Application, 91 FR 60119 (Sept. 22, 2026): https://www.federalregister.gov/documents/2026/09/22/2026-19368/agency-information-collection-activities-submission-to-the-office-of-management-and-budget-for-review-and-approval-comment