NASFAA Submits Comments Regarding NegReg’s PSLF Provisions
By Megan Walter, Senior Policy Analyst
NASFAA submitted comments to the Department of Education (ED) on Wednesday, strongly opposing the department’s proposal to narrow the definition of qualifying employers for the Public Service Loan Forgiveness (PSLF) program. Specifically, NASFAA cautioned against granting the Secretary broad, subjective authority to determine when an employer has engaged in activities with a “substantial illegal purpose,” noting that only the courts are empowered to make such determinations under existing law. Instead, NASFAA urged ED to rely on established legal and regulatory bodies and existing frameworks to guide eligibility determinations.
Concerning specific provisions, NASFAA supports treating distinct entities within a larger system separately for PSLF purposes and allowing corrective action plans to preserve eligibility. However, NASFAA noted that the draft text must be corrected to reflect that intent. NASFAA also recommended additional borrower protections, including a legacy provision for those already working at employers later deemed ineligible, and urged shortening the proposed 10-year ban on employer reentry to five years.
NASFAA also highlighted contradictions and unsupported claims in ED’s rationale, particularly around its inconsistent reliance on federal versus state law, and questioned how a rule projected to save $1.5 billion by denying PSLF can align with ED’s stated goal of strengthening public service recruitment.
Ultimately, NASFAA maintained that the department should not create a new process for employer ineligibility, which is more appropriately handled by the courts and agencies such as the IRS.
Publication Date: 9/18/2025
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