1. (a) Purpose. The Public Service Loan Forgiveness Program is intended to encourage individuals to enter and continue in full-time public service employment by forgiving the remaining balance of their Direct loans after they satisfy the public service and loan payment requirements of this section.

2. (b) Definitions. The following definitions apply to this section:

   1. (1) Aiding or abetting has the same meaning as defined under 18 U.S.C. 2.
   2. (2) AmeriCorps service means service in a position approved by the Corporation for National and Community Service under section 123 of the National and Community Service Act of 1990 (42 U.S.C. 12573).

   3. (3) Chemical castration or mutilation means:

      1. (i) The use of puberty blockers, including GnRH agonists and other interventions, to delay the onset or progression of normally timed puberty in an individual who does not identify as his or her sex; and
      2. (ii) The use of sex hormones, such as androgen blockers, estrogen, progesterone, or testosterone, to align an individual's physical appearance with an identity that differs from his or her sex.
   4. (4) Child or children for the sole and specific purpose of this section means an individual or individuals under 19 years of age.
   5. (5) Civilian service to the military means providing services to or on behalf of members, veterans, or the families or survivors of deceased members of the U.S. Armed Forces or the National Guard that is provided to a person because of the person's status in one of those groups.
   6. (6) Early childhood education program means an early childhood education program as defined in section 103(8) of the Act (20 U.S.C. 1003).
   7. (7) Eligible Direct Loan means a Direct Subsidized Loan, a Direct Unsubsidized Loan, a Direct PLUS Loan, or a Direct Consolidation Loan.
   8. (8) Emergency management means services that help remediate, lessen, or eliminate the effects or potential effects of emergencies that threaten human life or health, or real property.

   9. (9) Employee or employed means an individual:

      1. (i) To whom an organization issues an IRS Form W-2;
      2. (ii) Who receives an IRS Form W-2 from an organization that has contracted with a qualifying employer to provide payroll or similar services for the qualifying employer, and which provides the Form W-2 under that contract;
      3. (iii) who works as a contracted employee for a qualifying employer in a position or providing services which, under applicable State law, cannot be filled or provided by a direct employee of the qualifying employer.
   10. (10) Foreign Terrorist Organizations mean organizations on the list published under paragraph (a)(2)(A)(ii) under the Immigration and Nationality Act (8 U.S.C. 1189).

   11. (11) Full-time means:

       1. (i) Working in qualifying employment in one or more jobs—

          1. (A) A minimum average of 30 hours per week during the period being certified,
          2. (B) A minimum of 30 hours per week throughout a contractual or employment period of at least 8 months in a 12-month period, such as elementary and secondary school teachers and professors and instructors, in higher education, in which case the borrower is deemed to have worked full time; or
          3. (C) The equivalent of 30 hours per week as determined by multiplying each credit or contact hour taught per week by at least 3.35 in non-tenure track employment at an institution of higher education.
   12. (12) Illegal discrimination means a violation of any Federal discrimination law including, but not limited to, the Civil Rights Act of 1964 (42 U.S.C. 1981 et seq.), Americans with Disabilities Act (42 U.S.C. 12101 et seq.), and the Age Discrimination in Employment Act of 1967 (29 U.S.C. 621 et seq.).
   13. (13) Law enforcement means service that is publicly funded and whose principal activities pertain to crime prevention, control or reduction of crime, or the enforcement of criminal law.
   14. (14) Military service means “active duty” service or “full-time National Guard duty” as defined in section 101(d)(1) and (d)(5) of title 10 in the United States Code and does not include active duty for training or attendance at a service school.
   15. (15) Non-governmental public service means services provided by employees of a non-governmental qualified employer where the employer has devoted a majority of its full-time equivalent employees to working in at least one of the following areas (as defined in this section): emergency management, civilian service to military personnel, military service, public safety, law enforcement, public interest law services, early childhood education, public service for individuals with disabilities or the elderly, public health, public education, public library services, school library, or other school-based services. Service as a member of the U.S. Congress is not qualifying public service employment for purposes of this section.
   16. (16) Non-tenure track employment means work performed by adjunct, contingent or part time faculty, teachers, or lecturers who are paid based on the credit hours they teach at institutions of higher education.
   17. (17) Other Federal Immigration laws mean any violation of the Immigration and Nationality Act (8 U.S.C. 1105 et seq.) or any other Federal immigration laws.
   18. (18) Other school-based services mean the provision of services to schools or students in a school or a school-like setting that are not public education services, such as school health services and school nurse services, social work services in schools, and parent counseling and training.
   19. (19) Peace Corps position means a full-time assignment under the Peace Corps Act as provided for under 22 U.S.C. 2504.
   20. (20) Public education service means the provision of educational enrichment or support to students in a public school or a public school-like setting, including teaching.
   21. (21) Public health means those engaged in the following occupations (as those terms are defined by the Bureau of Labor Statistics): physicians, nurse practitioners, nurses in a clinical setting, health care practitioners, health care support, counselors, social workers, and other community and social service specialists.
   22. (22) Public interest law means legal services that are funded in whole or in part by a local, State, Federal, or Tribal government.
   23. (23) Public library service means the operation of public libraries or services that support their operation.
   24. (24) Public safety service means services that seek to prevent the need for emergency management services.
   25. (25) Public service for individuals with disabilities means services performed for or to assist individuals with disabilities (as defined in the Americans with Disabilities Act (42 U.S.C. 12102)) that is provided to a person because of the person's status as an individual with a disability.
   26. (26) Public service for the elderly means services that are provided to individuals who are aged 62 years or older and that are provided to a person because of the person's status as an individual of that age.

   27. (27) Qualifying employer means:

       1. (i)

          1. (A) A United States-based Federal, State, local, or Tribal government organization, agency, or entity, including the U.S. Armed Forces or the National Guard;
          2. (B) A public child or family service agency;
          3. (C) An organization under Section 501(c)(3) of the Internal Revenue Code of 1986 that is exempt from taxation under Section 501(a) of the Internal Revenue Code;
          4. (D) A Tribal college or university; or
          5. (E) A nonprofit organization that—
          6. (1) Provides a non-governmental public service as defined in this section, attested to by the employer on a form approved by the Secretary; and
          7. (2) Is not a business organized for profit, a labor union, or a partisan political organization; and
       2. (ii) Does not include organizations that engage in activities such that they have a substantial illegal purpose, as defined in this section.

   28. (28) Qualifying repayment plan means:

       1. (i) An income-driven repayment plan under § 685.209;
       2. (ii) The 10-year standard repayment plan under § 685.208(b) or the consolidation loan standard repayment plan with a 10-year repayment term under § 685.208(c);
       3. (iii) Except for the alternative repayment plan, any other repayment plan if the monthly payment amount is not less than what will have been paid under the 10-year standard repayment plan under § 685.208(b);
       4. (iv) An income-contingent repayment plan under § 685.209 for which a payment was received on or before June 30, 2028; or
       5. (v) The Repayment Assistance Plan as defined as defined under § 685.209.
   29. (29) School library services mean the operations of school libraries or services that support their operation.

   30. (30) Substantial illegal purpose means:

       1. (i) aiding or abetting violations of 8 U.S.C. 1325 or other Federal immigration laws;
       2. (ii) Supporting terrorism, including by facilitating funding to, or the operations of, cartels designated as Foreign Terrorist Organizations consistent with 8 U.S.C. 1189, or by engaging in violence for the purpose of obstructing or influencing Federal Government policy;
       3. (iii) Engaging in the chemical and surgical castration or mutilation of children in violation of Federal or State law;
       4. (iv) Engaging in the trafficking of children to another State for purposes of emancipation from their lawful parents in violation of Federal or State law;
       5. (v) Engaging in a pattern of aiding and abetting illegal discrimination; or
       6. (vi) Engaging in a pattern of violating State laws as defined in paragraph (b)(34) of this section.
   31. (31) Surgical castration or mutilation means surgical procedures that attempt to transform an individual's physical appearance to align with an identity that differs from his or her sex or that attempt to alter or remove an individual's sexual organs to minimize or destroy their natural biological functions.
   32. (32) Terrorism is defined under 18 U.S.C. 2331.
   33. (33) Trafficking means transporting a child or children from their State of legal residence to another State without permission or legal consent from the parent or legal guardian for purposes of emancipation from their lawful parents or legal guardian, in violation of applicable law.

   34. (34) Violating State law means a final, non-default judgment by a State court of:

       1. (i) Trespassing;
       2. (ii) Disorderly conduct;
       3. (iii) Public nuisance;
       4. (iv) Vandalism; or
       5. (v) Obstruction of highways.
   35. (35) Violence for the purpose of obstructing or influencing Federal Government policy means violating any part of 18 U.S.C. 1501 et seq. by committing a crime of violence as defined under 18 U.S.C. 16.

3. (c) Borrower eligibility.

   1. (1) A borrower may obtain loan forgiveness under this program if the borrower—

      1. (i) Is not in default on the loan at the time forgiveness is requested;

      2. (ii) Is employed full-time by a qualifying employer or serving in a full-time AmeriCorps or Peace Corps position—

         1. (A) When the borrower satisfied the 120 monthly payments described under paragraph (c)(1)(iii) of this section; and
         2. (B) At the time the borrower applies for forgiveness under paragraph (e) of this section; and
      3. (iii) Satisfies the equivalent of 120 monthly payments after October 1, 2007, as described in paragraph (c)(2) of this section, on eligible Direct loans.

   2. (2) Except as provided in paragraph (c)(4) of this section, a borrower will be considered to have made monthly payments under paragraph (c)(1)(iii) of this section by—

      1. (i) Paying at least the full scheduled amount due for a monthly payment under the qualifying repayment plan;
      2. (ii) Paying in multiple installments that equal the full scheduled amount due for a monthly payment under the qualifying repayment plan;
      3. (iii) For a borrower on an income-driven repayment plan under § 685.209, paying a lump sum or monthly payment amount that is equal to or greater than the full scheduled amount in advance of the borrower's scheduled payment due date for a period of months not to exceed the period from the Secretary's receipt of the payment until the borrower's next annual repayment plan recertification date under the qualifying repayment plan in which the borrower is enrolled;
      4. (iv) For a borrower on the 10-year standard repayment plan under § 685.208(b)(1) or the consolidation loan standard repayment plan with a 10-year repayment term under § 685.208(b)(2), paying a lump sum or monthly payment amount that is equal to or greater than the full scheduled amount in advance of the borrower's scheduled payment due date for a period of months not to exceed the period from the Secretary's receipt of the payment until the lesser of 12 months from that date or the date upon which the Secretary receives the borrower's next submission under subsection (e).

      5. (v) Except during periods when a borrower is enrolled in the Repayment Assistance Plan under § 685.209, receiving one of the following deferments or forbearances for the month:

         1. (A) Cancer treatment deferment under section 455(f)(3) of the Act;
         2. (B) Economic hardship deferment under § 685.204(g);
         3. (C) Military service deferment under § 685.204(h);
         4. (D) Post-active-duty student deferment under § 685.204(i);
         5. (E) AmeriCorps forbearance under § 685.205(a)(4);
         6. (F) National Guard Duty forbearance under § 685.205(a)(7);
         7. (G) U.S. Department of Defense Student Loan Repayment Program forbearance under § 685.205(a)(9);
         8. (H) Administrative forbearance or mandatory administrative forbearance under § 685.205(b)(8) or (9); and
      6. (vi) Being employed full-time with a qualifying employer, as defined in this section, at any point during the month for which the payment is credited.
   3. (3) If a borrower consolidates one or more Direct Loans into a Direct Consolidation Loan, including a Direct PLUS Loan made to a parent borrower, the weighted average of the payments the borrower made on the Direct Loans prior to consolidating and that met the criteria in paragraphs (c)(2)(i) through (vi) of this section will count as qualifying payments on the Direct Consolidation Loan.
   4. (4) Effective on or after July 1, 2026, through a standard as described in paragraph (h) of this section, 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) such that it has a substantial illegal purpose, as described in this section.
4. (d) Forgiveness amount. The Secretary forgives the principal and accrued interest that remains on all loans for which the borrower meets the requirements of paragraph (c) of this section as of the date the borrower satisfied the last required monthly payment obligation.

5. (e) Application process.

   1. (1) Notwithstanding paragraph (f) of this section, after making the 120 monthly qualifying payments on the eligible loans for which loan forgiveness is requested while working the 120 months of qualifying service, a borrower may request loan forgiveness by filing an application approved by the Secretary.
   2. (2) If the Secretary has sufficient information to determine the borrower's qualifying employer and length of employment, the Secretary informs the borrower if the borrower is eligible for forgiveness.
   3. (3) If the Secretary does not have sufficient information to make a determination of the borrower's eligibility for forgiveness, the borrower must provide additional information about the borrower's employment and employer on a form approved by the Secretary.
   4. (4) If the borrower is unable to secure a certification of employment from a qualifying employer, the Secretary may determine the borrower's qualifying employment or payments based on other documentation provided by the borrower at the Secretary's request.
   5. (5) The Secretary may request reasonable additional documentation pertaining to the borrower's employer or employment before providing a determination.
   6. (6) The Secretary may substantiate an employer's attestation of information provided on the form in paragraph (e)(3) of this section based on a review of information about the employer.

   7. (7) If the Secretary determines that the borrower meets the eligibility requirements for loan forgiveness under this section, the Secretary—

      1. (i) Notifies the borrower of this determination; and
      2. (ii) Forgives the outstanding balance of the eligible loans.
   8. (8) If the Secretary determines that the borrower does not meet the eligibility requirements for loan forgiveness under this section, grants forbearance of payment on both principal and interest for the period in which collection activity was suspended. The Secretary notifies the borrower that the application has been denied, provides the basis for the denial, and informs the borrower that the Secretary will resume collection of the loan. The Secretary does not capitalize any interest accrued and not paid during this period.
   9. (9) If the Secretary has notified the borrower's employer that the employer may no longer satisfy the definition of qualifying employer set forth in paragraph (b)(28) of this section, pending a determination made under paragraph (h) of this section, the Secretary notifies the borrower of the potential change in the employer's status.
   10. (10) If the Secretary has determined the borrower's employer has ceased to be a qualifying employer as a result of a determination made under paragraph (h) of this section, the Secretary notifies the borrower of the change in the employer's status.
6. (f) Application not required. The Secretary forgives a loan under this section without an application from the borrower if the Secretary has sufficient information in the Secretary's possession to determine the borrower has satisfied the requirements for forgiveness under this section.

7. (g) Reconsideration process.

   1. (1) Within 90 days of the date the Secretary sent the notice of denial of forgiveness under paragraph (e)(8) of this section to the borrower, the borrower may request that the Secretary reconsider whether the borrower's employer or any payment meets the requirements for credit toward forgiveness by requesting reconsideration on a form approved by the Secretary. Borrowers who were denied loan forgiveness under this section after October 1, 2017, and prior to July 1, 2023, have 180 days from the effective date of this Final Rule to request reconsideration.

   2. (2) To evaluate a reconsideration request, the Secretary considers—

      1. (i) Any relevant evidence that is obtained by the Secretary; and
      2. (ii) Additional supporting documentation not previously provided by the borrower or employer.
   3. (3) The Secretary notifies the borrower of the reconsideration decision and the reason for the Secretary's determination.
   4. (4) If the Secretary determines that the borrower qualifies for forgiveness, the Secretary adjusts the borrower's number of qualifying payments or forgives the loan, as appropriate.
   5. (5) After the Secretary makes a decision on the borrower's reconsideration request, the Secretary's decision is final, and the borrower will not receive additional reconsideration unless the borrower presents additional evidence.

   6. (6) Except for repayment periods when a borrower is repaying under the Repayment Assistance Plan under § 685.209, for any months in which a borrower postponed monthly payments under a deferment or forbearance and was employed full-time at a qualifying employer as defined in this section but was in a deferment or forbearance status besides those listed in paragraph (c)(2)(v) of this section, the borrower may obtain credit toward forgiveness for those months, as defined in paragraph (d) of this section, for any months in which the borrower—

      1. (i) Makes an additional payment equal to or greater than the amount they would have paid at that time on a qualifying repayment plan or
      2. (ii) Otherwise qualified for a $0 payment on an income-driven repayment plan under § 685.209.
   7. (7) Notwithstanding paragraph (g)(1) of this section, a borrower may not request reconsideration under this paragraph (g) based on the Secretary's determination that the organization lost its status as a qualifying employer due to engaging in activities that have a substantial illegal purpose under the standard described in paragraph (h) of this section.

8. (h) Standard for determining whether a qualifying employer has a substantial illegal purpose.

   1. (1) The Secretary determines by a preponderance of the evidence, and after notice and opportunity to respond (which is referred to as the “employer reconsideration process”), that a qualifying employer has engaged on or after July 1, 2026, in illegal activities such that it has a substantial illegal purpose by considering the materiality of any illegal activities or actions as described in paragraph (b)(30) of this section. In making such a determination, the Secretary shall presume that any of the following is conclusive evidence that the employer engaged in activities enumerated in paragraph (b)(30):
9. (i) A final judgment by a State or Federal court, whereby the employer is found to have engaged in illegal activities that have a substantial illegal purpose;
10. (ii) A plea of guilty or nolo contendere, whereby the employer admits to have engaged in illegal activities that have a substantial illegal purpose or pleads nolo contendere to allegations that the employer engaged in illegal activities that have substantial illegal purpose; or
11. (iii) A settlement that includes admission by the employer that it engaged in illegal activities that have a substantial illegal purpose described in paragraph (h) of this section.

12. (2) Nothing in this paragraph (h)(2)shall be construed to authorize the Secretary to determine an employer has 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.

    1. (i) Process for determining when a qualifying employer engaged in activities such that it has a substantial illegal purpose.

    2. (1) The Secretary will determine that a qualifying employer violated the standard under paragraph (h) of this section when the Secretary:

       1. (i) Receives an application as referenced under paragraph (e) of this section in which the employer fails to certify that it did not participate in activities that have a substantial illegal purpose; or
       2. (ii) Determines that the qualifying employer engaged in activities such that it has a substantial illegal purpose under paragraph (h) of this section, unless, prior to the issuance of the Secretary's determination, the Secretary includes the factors set forth in paragraph (j)(2) of this section.
    3. (2) Notwithstanding paragraph (i)(1) of this section, the Secretary shall, in the event an employer is operating under a shared identification number or other unique identifier, consider the organization to be separate if the employer is operating separately and distinctly, for the purposes of determining whether an employer is eligible.

    4. (j) Regaining eligibility as a qualifying employer. An organization that loses eligibility for failure to meet the conditions of paragraph (b)(27) of this section may regain eligibility to become a qualifying employer after—

       1. (1) 10 years from the date the Secretary determines the organization engaged in activities such that it has a substantial illegal purpose in accordance with paragraph (h) of this section, if, at or after that time, the organization certifies on a borrower's subsequent application that the organization is no longer engaged in activities that have a substantial illegal purpose as defined in paragraph (b)(30) of this section; or

       2. (2) The Secretary approves a corrective action plan signed by the employer that includes—

          1. (i) a certification by the employer that it is no longer engaging in activities that have a substantial illegal purpose as defined in paragraph (b)(30) of this section;
          2. (ii) a report describing the employer's compliance controls that are designed to ensure that the employer does not continue to engage in activities that have a substantial illegal purpose as defined in paragraph (b)(30) of this section in the future; and
          3. (iii) any other terms or conditions imposed by the Secretary designed to ensure that employers do not engage in actions or activities that have a substantial illegal purpose.
    5. (k) Borrower notification of regained eligibility. If an employer regains eligibility under paragraph (j) of this section, the Secretary shall update the qualifying employer list, which is accessible to borrowers for purposes of certification or application.

[91 FR 23897, May 1, 2026]