A coalition of states is pressing a federal judge (PDF File) to halt the Department of Education's new Public Service Loan Forgiveness (PSLF) rule before it takes effect July 1, 2026. This comes after the Department moved to add a sworn attestation to the program's certification forms in a Federal Register notice (PDF File).
The new rule lets the Secretary of Education strip PSLF eligibility from employers (including state and local governments) that the Department decides have a "substantial illegal purpose." The form change would require employers to confirm, under penalty of perjury, that they have not engaged in such activity.
For more millions of public service workers, an employer's disqualification can mean losing access to loan forgiveness.
PSLF has canceled more than $85 billion in federal student loans for over one million borrowers since the program began. The Department estimates the revised certification form covers roughly 913,713 responses a year.
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Driving The News
On June 22, 2026, plaintiffs filed a notice of supplemental authoritypslf pointing the court to a June 18 Federal Register notice (91 Fed. Reg. 36812). In it, the Department requested an "emergency clearance" under the Paperwork Reduction Act to revise the PSLF and TEPSLF certification form, asking the Office of Management and Budget to sign off no later than June 26.
The revised form adds an attestation, 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." A related correction notice confirms the certification would be mandatory, not optional.
The states say the filing shows the rule is imminent and renewed their request that the court rule on their pending summary judgment motions (which ask the judge to vacate and block the rule) before the July 1 effective date.
Catch Up
Twenty-one states and the District of Columbia sued the Department in November 2025 over the final rule, which was promulgated October 31, 2025.
It came out of a negotiated rulemaking that ended without consensus. The rule's listed "illegal purposes" include aiding illegal immigration, supporting terrorism, certain medical procedures for minors, and illegal discrimination.
Plaintiffs argue the standard is vague, pretextual, and exceeds the Department's authority under the PSLF statute, which defines qualifying public service to cover essentially all government jobs except members of Congress.
How This Connects
The College Investor has tracked this fight from the proposed rule through the lawsuits.
Earlier coverage detailed how 21 states sued over the rule and laid out a 2026 PSLF strategy alongside the new RAP repayment plan and Parent PLUS changes.
The core risk for borrowers is unchanged: if a state, city, or nonprofit employer is deemed to have a "substantial illegal purpose," its staff could lose eligibility unless they move to another qualifying employer.
The Department asked OMB to approve the form by June 26, with the rule set to take effect July 1. The judge could rule on the states' summary judgment motions at any point and the plaintiffs want a decision before the deadline.
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Editor: Colin Graves
Robert Farrington is the founder of The College Investor and is widely recognized as one of the nation’s leading voices on student loan debt and saving for college. He holds an MBA from UC San Diego Rady School of Management and has spent over 15 years researching, writing, and advising on student loans, 529 plans, financial aid programs, and saving and investing for young professionals.
Robert has been featured in the The New York Times, The Wall Street Journal, The Washington Post, NBC News, and Forbes, where he has been a regular personal finance contributor for over a decade. His work combines both professional expertise and personal experience – he successfully navigated his own student loan repayment journey and has helped thousands of readers do the same.
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