Overview
- Two federal courts vacated the Education Department’s final rule less than 24 hours before it was to take effect, with judges issuing the orders on Tuesday.
- The rule would have let the department disqualify employers from PSLF if it found they had a “substantial illegal purpose,” a definition that named activities such as aiding illegal immigration, supporting terrorism, illegal discrimination, and certain medical care for minors.
- Judges concluded the department exceeded the statutory authority Congress gave it and said the rule risked chilling protected speech and imposing the administration’s policy views on eligible employers.
- Because the rulings prevent the rule from taking effect, borrowers who work for government or qualifying nonprofits keep counting qualifying payments toward forgiveness under the program that has helped over one million people since 2007.
- The Education Department is expected to appeal, so the legal fight over agency power, borrower protections, and employer eligibility will likely move to higher courts and prolong uncertainty for public servants.