The U.S. Department of Education released final regulations narrowing which employers qualify for Public Service Loan Forgiveness (PSLF), forbidding organizations it deems to have a “substantial illegal purpose” from counting as qualifying employers. The rule implements a March executive order and targets groups the administration says aid illegal immigration or engage in illegal discrimination, and takes effect July 2026. Advocacy organizations immediately signaled legal challenges, arguing the move injects ideology into a program designed to support public servants such as teachers and school employees. Higher education leaders warned the rule could complicate loan forgiveness for staff at nonprofits that partner with campuses or provide student services. The department says the changes restore program integrity; opponents say the rule creates uncertainty for borrowers and employers alike.