Two federal courts struck down new Public Service Loan Forgiveness regulations that were set to take effect on July 1, 2026, creating immediate uncertainty for borrowers and employers trying to plan for PSLF changes.
The rulings, issued June 30, 2026, vacated a Department of Education rule that would have let the Secretary disqualify employers from PSLF if they had a “substantial illegal purpose,” the courts said the rule exceeded the department’s authority and contradicted the statute, according to reporting by Student Loan Planner.
At the same time, the Education Department later acknowledged reversing some borrowers’ qualifying PSLF payment counts while correcting data and system errors, a move the department described as intended to fix past coding mistakes but that left some borrowers reporting lost credit, according to Forbes.
Those two developments — courts blocking the new restriction and the agency’s separate rescissions of PSLF credit — are why public service loan forgiveness faces renewed uncertainty in late 2026, experts and borrower advocates say. The dual developments affect how borrowers tally qualifying payments and which employers count as qualifying public service jobs.
Borrowers should note the department posted a banner on StudentAid.gov after the court decisions advising that certain proposed form language would have no effect while the agency updates forms, and that employers may use the previous PSLF employment certification form, Student Loan Planner reported.
Advocates hailed the court victories as protecting borrowers who work for nonprofits and governments, and the Student Loan Planner piece quotes litigation leaders calling the rulings a win for those pursuing forgiveness.
But Forbes reported that in August 2026 the Education Department confirmed it had intentionally reversed some PSLF credit while working to resolve system errors, and the department has not fully disclosed the scope or whether all affected borrowers will have legitimate credits restored.
That combination — a judge-made block on rule changes and agency data reversals — leaves important questions unresolved: whether the department will appeal the court decisions, how quickly it will correct payment counts, and whether further regulatory changes could be proposed, all of which affect borrowers trying to qualify for public service loan forgiveness.
For practical next steps, borrowers pursuing public service loan forgiveness should keep employment certification records, regularly check their StudentAid.gov PSLF tracker, and consult guidance from advocacy groups while the legal and technical issues are worked through. The site’s recent coverage of Student loan: key 2026 updates borrowers need to know and changes to repayment options starting July 1, 2026, Student loans: federal repayment options narrowed for new loans starting July 1, 2026, explain related shifts borrowers should watch.
The two court decisions gave borrowers immediate relief by blocking the disqualification mechanism, but the Education Department could still appeal, and separate operational errors have already changed some borrowers’ credit counts, according to the reporting used here.
Sources
- Student Loan Planner — June 30, 2026 court rulings vacating the Education Department’s new PSLF rule and what the decisions mean for borrowers.
- Forbes — August 18, 2026 reporting that the Education Department confirmed reversing some PSLF qualifying payment counts while working to fix data errors.
- ECIKS.org — court calendar and docket listings cited for the October 2026 Supreme Court docket (used to confirm timing of related high-court activity in 2026).
