PSLF Changes in 2026: What Changed July 1, What Didn't, and What to Do Now

Public Service Loan Forgiveness is not going away in 2026. The 120-payment, 10-year structure is intact, and Congress did not repeal PSLF.

But three things changed this year: a Department of Education final rule on which employers qualify was vacated in court on June 30, 2026 — the day before its effective date; the Repayment Assistance Plan (RAP) launched July 1 under the One Big Beautiful Bill Act; and a March 2026 revision changed the PSLF buyback formula. Each affects a different group of borrowers, and what you should do depends on which applies to you.

No. PSLF is a statutory program — Section 455(m) of the Higher Education Act — and only Congress can eliminate it. No executive order, no rulemaking, and no agency reorganization can end the program on its own. Existing payment counts and completed forgiveness discharges are protected.

Three news events drive the “is PSLF going away” question:

• March 7, 2025: President Trump signed Executive Order 14235, “Restoring Public Service Loan Forgiveness,” directing the Department of Education to revise which employers qualify.

• July 4, 2025: Trump signed the One Big Beautiful Bill Act (OBBBA), creating RAP and phasing out most existing income-driven repayment plans.

• October 31, 2025: The Department of Education published its final rule on employer eligibility in the Federal Register, set to take effect July 1, 2026 — a rule federal courts vacated on June 30, 2026, before it ever applied to a single borrower.

Related: Can PSLF Be Reversed? · What Happens to Student Loans If the Department of Education Is Abolished

What did change on July 1 is which repayment plans are available and how the buyback formula works. The employer-eligibility rule never made it: courts struck it down the day before it took effect.

This rule never took effect. On June 30, 2026 — the day before its July 1 effective date — Judge Myong Joun of the federal district court in Massachusetts vacated it, ruling in the consolidated lawsuits brought by a coalition of nonprofit organizations and by 21 states and the District of Columbia that the rule exceeded the Department of Education’s statutory authority and violated the First Amendment. The same day, the federal district court in Washington, D.C. struck the rule down in a separate suit led by the Robert F. Kennedy Center for Justice and Human Rights. The vacatur applies nationwide. The Department may appeal, but unless a higher court revives the rule, the employer test is what it has always been: government agencies and 501(c)(3) nonprofits qualify, and no “substantial illegal purpose” screen applies.

Here is what the rule would have done. Announced October 30, 2025, and published in the Federal Register on October 31, 2025, it would have amended 34 CFR 685.219 to let the Secretary of Education disqualify any employer found by a preponderance of the evidence to have a “substantial illegal purpose” — defined to include activities that breach federal or state law, with examples like aiding illegal immigration and supporting terrorism, and broad discretion left to the Department.

Three points matter now:

• Your PSLF credit was never touched. Because the rule was vacated before its effective date, no employer was ever disqualified under it and no borrower lost a qualifying month. Even the rule’s own text protected credit for months worked before any disqualification determination.

• Most nonprofits and government employers were never targets. Public schools, government agencies, 501(c)(3) hospitals, libraries, and traditional public service employers were not the focus of the rule even as written.

• The litigation isn’t necessarily over. Three lawsuits challenged the rule — two in Massachusetts (one brought by 21 states and the District of Columbia, one by a coalition of nonprofit organizations, cities, and unions) and one in Washington, D.C., led by the Robert F. Kennedy Center for Justice and Human Rights. On June 30, both courts vacated the rule. The Department may still appeal — the Massachusetts decision to the First Circuit, the D.C. decision to the D.C. Circuit. Until an appeals court says otherwise, the vacatur stands and the rule has no legal effect.

Related: Can Your Nonprofit Employer Lose PSLF Eligibility Under Trump’s Executive Order?

What this means if you work for a 501(c)(3) nonprofit

All 501(c)(3) nonprofits remain eligible — the vacated rule never changed anyone’s status. Even as written, it targeted narrower categories the administration deemed unlawful. If you work at a standard service-providing nonprofit — a hospital, legal aid clinic, community health center, food bank, shelter, or advocacy organization with no legal exposure — your employer is almost certainly still eligible. If your nonprofit’s mission touches immigration services, reproductive health, or politically contested advocacy, keep submitting employment certifications regularly anyway — certified months are the hardest thing for any future version of the rule to unwind if the Department appeals and wins.

What this means if you work for a government employer

Government employers — federal, state, local, and tribal — are unaffected. The vacated rule targeted employers allegedly engaged in illegal activity; government agencies operating under legal authority were never in scope.

Related: Does My Employer Qualify for PSLF?

What this means for healthcare workers

Hospitals and clinics that are 501(c)(3) nonprofits or government-run remain eligible. The vacated rule never changed the underlying test for healthcare employers.

Related: Public Service Loan Forgiveness Hospitals: How to Verify Eligibility

What this means for teachers

Public school districts, state and public universities, and 501(c)(3) private schools remain qualifying employers.

Related: Are Teachers Public Service Workers?

The One Big Beautiful Bill Act, signed July 4, 2025, created the Repayment Assistance Plan (RAP) — a new income-driven repayment plan that launched July 1, 2026, and is now enrolling on studentaid.gov. RAP counts as a qualifying repayment plan for PSLF. The 120-payment, 10-year structure is unchanged; what changes is which IDR plans you can use.

SAVE is gone. The SAVE Final Rule was vacated on March 10, 2026, after the Eighth Circuit reversed a February dismissal and directed the district court to enter final judgment vacating the rule. The Department announced a transition window for the roughly seven million borrowers enrolled in SAVE or its predecessor. OBBBA also phases out PAYE and ICR by July 1, 2028.

Related: What Is the Repayment Assistance Plan (RAP)? — payment calculation, forgiveness timeline, trade-offs versus IBR.

This section focuses on what RAP means for PSLF borrowers.

Your IDR options depend on when your loans were first disbursed:

• Before July 1, 2026: You keep IBR. You can opt into RAP now that it’s live. PAYE and ICR remain available for pre-July-2026 loans until their July 2028 sunset.

• On or after July 1, 2026: RAP is your only income-driven option. PSLF still applies under the 120-payment rule; the math is RAP’s.

For most borrowers, RAP produces higher monthly payments than SAVE did.

Related: Why Did My Federal Student Loan Payment Increase?

What this means if you’re already on IBR

Your PSLF payment count continues uninterrupted. You can opt into RAP now — but run the math before switching: RAP has no cap tied to the 10-year Standard payment, so higher earners can pay more on RAP than they would on IBR. Borrowers with only pre-July-2026 loans can switch back to IBR later under the rule, though the reverse move is so far untested in practice — and RAP months, while they count for PSLF, never count toward IBR’s own 20- or 25-year forgiveness clock.

Related: Is RAP or IBR Better for PSLF?

What this means if you were on SAVE

Servicers are now sending 90-day notices to pick a new plan. Miss the window and, if all your loans predate July 1, 2026, you’ll be placed on the legacy 10-year Standard plan. Those payments do count toward PSLF — but a plan that pays your loans off in 10 years leaves little for PSLF to forgive, and the payment is usually far higher than an income-driven one. Don’t confuse it with the new Tiered Standard plan, which doesn’t qualify for PSLF at all — no tier of it, including the 10-year tier. Switch to IBR now, or compare RAP — it’s live, and enrollment is processing on studentaid.gov.

Related: Should You Switch IDR Plans in 2026? · What Happens to IBR and SAVE Borrowers When RAP Starts

What this means if you’re on PAYE or ICR

PAYE and ICR sunset by July 1, 2028. Switch to IBR or RAP before then to keep earning PSLF credit.

Related: Income-Driven Repayment Plans in 2026

What this means if you’ll borrow new federal loans after July 1, 2026

RAP is your only income-driven option, and you have to choose it — if you pick nothing, you’re placed in the Tiered Standard plan by default, and Tiered payments never count toward PSLF. PSLF itself still applies to those loans under the same 120-payment rule.

Parent PLUS and PSLF — the June 30, 2026 deadline has passed

The door for Parent PLUS borrowers closed on June 30, 2026. Only Parent PLUS loans consolidated into a Direct Consolidation Loan disbursed on or before that date can reach an income-driven plan — and without IDR, there’s no PSLF path.

If you consolidated in time: IBR is the destination. If your servicer approves IBR on the consolidation, make one IBR payment to lock in your eligibility — and certify your employment now. If it denies IBR (common on a fresh consolidation), enroll in ICR, make one payment, then switch to IBR. Don’t park on ICR: it counts as a PSLF-qualifying plan only through June 30, 2028.

If you didn’t: consolidating now won’t restore PSLF eligibility for those loans. See Missed the Parent PLUS Consolidation Deadline? Here’s What to Do Now.

Related:

• Parent PLUS Loan Consolidation

• Student Loan Changes on July 1, 2026 · Big Beautiful Bill Student Loan Changes

On March 31, 2026, the Department of Education revised how it calculates PSLF buyback payments for deferment and forbearance months on or after July 1, 2024. Earlier periods still use the rules that applied when those months occurred.

The practical effect: borrowers buying back months spent in SAVE administrative forbearance will now pay more — often substantially more. Under the old approach, buyback for those months was calculated using the SAVE formula, which produced the lowest IDR payments available. Under the revised approach, the Department computes the buyback amount using an alternative IDR plan (typically IBR, PAYE, or ICR) based on your income and family size for the relevant period.

Roughly 88,000 buyback applications were pending as of late February 2026; many are now being recalculated.

Three things to know:

• Buyback itself still exists. The change affects the formula, not the program.

• Processing is still slow. Most applications take 6 to 12 months despite a 45-business-day target.

• You may still owe a refund if a buyback pushed you past 120 payments.

Related:

• PSLF Buyback Program: How It Works — eligibility, application steps, and the full calculation methodology

• PSLF Buyback Timeline

• How PSLF Overpayment Refund Works

If you’ve been around PSLF long enough, you remember Temporary Expanded PSLF — and its old application page still exists, which generates a steady stream of “is TEPSLF still a thing?” confusion.

What it was. Congress created TEPSLF in 2018 (Consolidated Appropriations Act) to patch one specific PSLF failure: borrowers who made their 120 payments on the wrong repayment plan — Graduated, Extended, or the Consolidation Standard/Graduated plans — and were denied because those plans didn’t qualify. TEPSLF let those payments count, from a capped pot of appropriated money.

What it is now. Still technically open — studentaid.gov continues to list it as a temporary, limited-funding opportunity, first come, first served, ending whenever the money runs out. But the fit is narrow: Direct Loans only (defaulted loans and Parent PLUS loans made to you as a parent are excluded), 10+ years of certified qualifying employment, 120 qualifying payments, and a payment test — your last payment and the one 12 months prior must have been at least what you’d have paid on an income-driven plan (RAP excluded from that comparison).

You don’t apply for it separately. There is one PSLF form; submitting it automatically considers you for both PSLF and TEPSLF. If TEPSLF is your route, the servicer follows up for income information — respond within the stated window or the request is canceled and you lose your place in line.

Why you rarely need it anymore. The 2021–22 limited waiver and the one-time IDR account adjustment retroactively fixed most wrong-plan and wrong-loan histories, and today’s remaining gaps mostly route through PSLF buyback instead. TEPSLF survives as a niche fix for Graduated/Extended-plan payment history that nothing else has credited.

What to do: if you have 120+ payments and some were on Graduated or Extended plans, submit the PSLF form now — first come, first served means waiting has a real cost. If your problem is forbearance or deferment months instead, buyback is the tool.

If you have existing PSLF credits and an eligible employer

Submit an employment certification now, even if you certified within the last year. This locks in credit for every month worked through the filing date. Stay on a qualifying plan — IBR if your loans predate July 1, 2026, or RAP, which is now live. Keep your own records: pay stubs, payment receipts, and copies of every PSLF form.

If you were enrolled in SAVE

Switch to IBR now or enroll in RAP — it’s live, and enrollment is processing on studentaid.gov — but don’t let auto-enrollment park you in Standard Repayment when the 90-day notice runs out. Your SAVE qualifying months transfer to any other IDR plan.

Related: Should You Switch IDR Plans in 2026?

If you have Parent PLUS loans and want PSLF

That door closed on June 30, 2026. If your consolidation was disbursed on or before that date, IBR is the destination — if your servicer approves it, one IBR payment locks in your eligibility; if it denies IBR (common on a fresh consolidation), enroll in ICR, make one payment, then switch to IBR. Certify your employment now either way — and don’t park on ICR: it only qualifies for PSLF through June 30, 2028. If you missed the deadline, consolidating now won’t restore PSLF eligibility; see the missed-deadline guide linked above.

Related: Parent PLUS Loan Consolidation

If you have FFEL or Perkins loans and want PSLF

Consolidate to a Direct Loan. FFEL and Perkins loans don’t qualify for PSLF on their own; only Direct Loans do. This rule hasn’t changed — the July 2026 changes don’t alter it.

If you were worried about the employer disqualification rule

You can stand down — the rule was vacated on June 30, 2026, and never took effect, so no employer lost eligibility under it. Keep good records anyway: pay stubs, W-2s, dated offer letters, and every employment certification you can pull. If the Department appeals and a future version of the rule survives, months you’ve already certified are the hardest to take away.

Related: Can Your Nonprofit Employer Lose PSLF Eligibility?

If you’ve already made 120 qualifying payments

File for forgiveness. Don’t wait for an annual certification cycle, a servicer prompt, or any other signal. If you’ve made more than 120 qualifying payments — for example, because past months were credited through the IDR Account Adjustment — you may also be owed a refund.

Related: How PSLF Overpayment Refund Works

If you were denied PSLF

File a reconsideration request. PSLF Reconsideration lets you correct eligibility errors — most commonly an employer wrongly marked ineligible or a miscounted payment history — without starting over.

Related: PSLF Reconsideration: How to Fix a Denied PSLF Application

• October 1, 2007 — PSLF enacted. When Did PSLF Start?

• March 7, 2025 — Executive Order 14235, “Restoring Public Service Loan Forgiveness,” signed.

• July 4, 2025 — One Big Beautiful Bill Act signed; creates RAP, phases out SAVE/PAYE/ICR, sets Parent PLUS consolidation deadline.

• October 30, 2025 — Department of Education announces final rule on employer eligibility.

• October 31, 2025 — Final rule published in the Federal Register.

• February 9, 2026 — Summary judgment motions filed in three lawsuits challenging the rule.

• March 9, 2026 — Eighth Circuit reverses SAVE dismissal in Missouri v. Trump.

• March 10, 2026 — District court enters final judgment vacating the SAVE Final Rule.

• March 31, 2026 — Buyback formula revised for periods on or after July 1, 2024.

• April 1, 2026 — Recommended deadline for Parent PLUS consolidation applications.

• June 30, 2026 — Last day for Parent PLUS consolidation to be disbursed and preserve IDR/PSLF access.

• June 30, 2026 — Federal courts in Massachusetts and Washington, D.C. vacate the employer-eligibility rule the day before its effective date; it never takes effect.

• July 1, 2026 — RAP launches; SAVE borrowers get 90-day notices; new borrowers choose RAP or Tiered Standard (Tiered is the default if they choose nothing — and it never counts toward PSLF).

• July 1, 2028 — PAYE, ICR, and SAVE eliminated; only IBR and RAP remain.