On Oct. 31, 2025, the Federal Department of Education issued a final rule related to the Public Service Loan Forgiveness Program and a fact sheet amending the definition of “qualifying employer” to exclude employers that participate in activities that result in their having a “substantial illegal purpose.”
Employers could be excluded from the program and their participating employees rendered ineligible for loan forgiveness. Hospitals who employ participants in the program should review these materials carefully against existing policies and practices and identify areas of potential risk. The range of activities is broad, including immigration enforcement, gender affirming care, DEI activities and more.
The final rules are scheduled to take effect in July 2026. The Washington State Attorney General’s Office has filed a lawsuit challenging the rule. It also has a website where potentially impacted program participants can learn more.
WSHA is deeply concerned about the breadth of the new rule, its potential to intersect with even routine hospital operations and the impacts it may have on program participants and hospital employers. We are in communication with the Attorney General’s Office and support a challenge to the rule as currently drafted.
Sincerely,
Taya Briley
WSHA Executive Vice President and General Counsel
Tayab@wsha.org