"On September 16, 2025, the American Federation of Teachers (AFT) sought class certification and a preliminary injunction—requests for interim relief—following its March 18, 2025, suit in the U.S. District Court for the District of Columbia against the U.S. Department of Education and the Secretary of Education, Linda McMahon, in her official capacity," Newsweek reports.

... "NASFAA’s September 17 letter warns that the proposed PSLF rules could undermine nearly two decades of bipartisan support and urges reliance on findings from courts or agencies like the IRS."

"Newsweek spoke exclusively with Megan Walter, NASFAA senior policy analyst: 'I think the most significant legal risk is granting the Secretary of Education what NASFAA sees as unilateral authority to determine that an employer has a 'substantial illegal purpose' without that determination being based on an actual court finding. We would argue that only the judicial system has the authority to declare an activity illegal.'"

"'As written, the proposed rules would allow the Department to make these determinations based on a 'preponderance of the evidence,' which undermines the established legal process and could lead to prolonged legal limbo for both borrowers and their employers.'"

"On how NASFAA believes the Department should revise the proposal to better serve borrowers and institutions, Walter said: 'Fundamentally, our position is that the Department should not create a new process for determining employer ineligibility. We believe this function is already served by bodies like the IRS and the court system, whose findings should be the basis for any change in PSLF status.'"

"'We recommend that the Department create a 'legacy provision' to allow individuals to continue earning PSLF credit if their employer is deemed ineligible during their employment, protecting borrowers and preventing a 'mass exodus of public servants' that could harm communities, particularly in fields like health care and education.'"

"'We also recommend that the Department incorporate detailed due process procedures, similar to those in other established regulations, such as borrower defense to repayment.'"

"And when asked, she anticipates additional action from NASFAA or coalition partners before the rulemaking process concludes, Walters said: 'I don’t expect NASFAA to take additional action beyond submitting our comments in response to the proposed regulations and continuing to express our concerns with the proposed rules.'"

... "Megan Walter, NASFAA senior policy analyst, told Newsweek: 'Unrelated to NASFAA's work in this area, there is widespread belief among many organizations, including legal organizations, that the Department is exceeding its legal authority with these proposed rules, creating the expectation of legal challenges.'"

NASFAA's "Notable Headlines" section highlights media coverage of financial aid to help members stay up to date with the latest news. Articles included under the notable headlines section are not written by NASFAA, but rather by external sources. Inclusion in Today's News does not imply endorsement of the material or guarantee the accuracy of information presented.

Publication Date: 9/27/2025