William D. Ford Federal Direct Loan (Direct Loan) Program

As part of its continuing effort to reduce paperwork and respondent burden, the Department provides the public and Federal agencies with an opportunity to comment on proposed and continuing collections of information in accordance with the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3506(c)(2)(A)). This helps ensure that the public understands the Department's collection instructions, respondents can provide the requested data in the desired format, reporting burden (time and financial resources) is minimized, collection instruments are clearly understood, and the Department can properly assess the impact of collection requirements on respondents.

Section 685.219(i) of these regulatory changes will require an update to the currently approved Public Service Loan Forgiveness Certification and Application, OMB #1845-0110 (PSLF Form). The Department will amend the PSLF form to include the ability for a qualifying employer to certify that it has not engaged in activity that has a substantial illegal purpose. The burden on this information collection will not significantly change for the borrower to complete the form. This form update will be completed and made available for comment through a full public clearance package before being made available for use by the effective date of the regulations. Any burden changes will be assessed to OMB #1845-0110, Public Service Loan Forgiveness Certification and Application. The amendments to the regulation do not significantly change the estimated number of respondents or responses for individuals in this collection. The Department estimates that there will be a nominal change in the number of borrowers completing the PSLF Form. The Department expects that borrowers who currently work for non-qualifying employers will likely submit a form to either switch employers or because they are uncertain about their employer's eligibility status.

Section 685.219(j) of the final regulation will allow an employer to re-establish eligibility for PSLF if the Secretary approves a corrective action plan. The Department believes that, annually, there will be less than ten employers responding to the Department's notice of an initiated action and/or seeking approval of a corrective action plan. No additional burden has been assessed based on this final rule as the anticipated number of annual respondents falls below ten, which is the minimum required for OMB approval of an information collection.

A Federal agency may not conduct or sponsor a collection of information unless OMB approves the collection under the PRA and the corresponding information collection instrument displays a currently valid OMB control number. Notwithstanding any other provision of law, no person is required to comply with or is subject to a penalty for failure to comply with a collection of information if the collection instrument does not display a currently valid OMB control number.

Analysis of Public Comments & Changes

Comments: Several commenters argued that the proposed requirements could trigger additional reporting and documentation obligations that may not comply with the PRA. They emphasized that duplicative or unclear reporting burdens would impose unnecessary strain on organizations and potentially violate statutory limits. Commenters asked the Department to explicitly evaluate and minimize any new paperwork requirements.

Discussion: The Department acknowledges the importance of the PRA and will comply fully with its requirements. However, the claim that this final rule creates duplicative or unlawful reporting burdens is misplaced. The rule does not impose unnecessary or redundant reporting obligations. It aligns PSLF program documentation with existing Federal and State oversight systems and streamlines requirements where possible to avoid duplication. The Department is committed to minimizing burden while preserving accountability. The Department's commitment to promoting sound financial stewardship of government programs, including the PSLF program, while alleviating unnecessary regulatory burdens, is informed in part by President Trump's Executive Order on Unleashing Prosperity Through Deregulation (Jan. 31, 2025). PRA review will ensure that any reporting is necessary, clear, and efficient. Borrowers and taxpayers alike deserve a program that is transparent, fair, and protects Federal investment. The Department will enforce the law firmly, while making sure compliance is efficient, lawful, and aligned with statutory obligations.

Changes: None.

Executive Order 13132 requires us to provide meaningful and timely input by State and local elected officials in the development of regulatory policies that have Federalism implications. “Federalism implications” means substantial direct effects on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. The regulations do not have Federalism implications.

Accessible Format: On request to the program contact person(s) listed under FOR FURTHER INFORMATION CONTACT, individuals with disabilities can obtain this document in an accessible format. The Department will provide the requestor with an accessible format that may include Rich Text Format (RTF) or text format (txt), a thumb drive, an MP3 file, braille, large print, audiotape, or compact disc, or another accessible format.

Electronic Access to This Document: The official version of this document is the document published in the Federal Register. You may access the official edition of the Federal Register and the Code of Federal Regulations at www.govinfo.gov where you can view this document, as well as all other documents of this Department published in the Federal Register, in text or Adobe Portable Document Format (PDF). To use PDF, you must have Adobe Acrobat Reader, which is available free at the site.

You may also access documents of the Department published in the Federal Register by using the article search feature at www.federalregister.gov. Specifically, through the advanced search feature at this site, you can limit your search to documents published by the Department.

34 CFR Part 685

Administrative practice and procedure, Colleges and universities, Education, Loan programs--education, Reporting and recordkeeping requirements, Student aid, Vocational education.

Nicholas Kent, Under Secretary of Education.

For the reasons discussed in the preamble, the Secretary of Education amends part 685 of title 34 of the Code of Federal Regulations as follows:

PART 685--WILLIAM D. FORD FEDERAL DIRECT LOAN PROGRAM

0 1. The authority citation for part 685 is revised to read as follows:

Authority: 20 U.S.C. 1070g, 1087a, et seq., unless otherwise noted.

0 2. Amend Sec. 685.219 by: 0 a. Adding paragraphs (b)(1) through (b)(35); 0 b. Revising paragraphs (c)(2)introductory text and(c)(4); and 0 c. Adding paragraphs(e)(9) and (10),(g)(7), and (h) through (k).

The additions and revisions read as follows:

Sec. 685.219 Public Service Loan Forgiveness Program (PSLF).

* * * * *

(b) * * *

(1) Aiding or abetting has the same meaning as defined under 18 U.S.C. 2.

(2) AmeriCorps service means service in a position approved by the Corporation for National and Community Service under section 123 of the National and Community Service Act of 1990 (42 U.S.C. 12573).

(3) Chemical castration or mutilation means:

(i) The use of puberty blockers, including GnRH agonists and other interventions, to delay the onset or progression of normally timed puberty in an individual who does not identify as his or her sex; and

(ii) The use of sex hormones, such as androgen blockers, estrogen, progesterone, or testosterone, to align an individual's physical appearance with an identity that differs from his or her sex.

(4) Child or children for the sole and specific purpose of this section means an individual or individuals under 19 years of age.

(5) Civilian service to the military means providing services to or on behalf of members, veterans, or the families or survivors of deceased members of the U.S. Armed Forces or the National Guard that is provided to a person because of the person's status in one of those groups.

(6) Early childhood education program means an early childhood education program as defined in section 103(8) of the Act (20 U.S.C. 1003).

(7) Eligible Direct Loan means a Direct Subsidized Loan, a Direct Unsubsidized Loan, a Direct PLUS Loan, or a Direct Consolidation Loan.

(8) Emergency management means services that help remediate, lessen, or eliminate the effects or potential effects of emergencies that threaten human life or health, or real property.

(9) Employee or employed means an individual:

(i) To whom an organization issues an IRS Form W-2;

(ii) Who receives an IRS Form W-2 from an organization that has contracted with a qualifying employer to provide payroll or similar services for the qualifying employer, and which provides the Form W-2 under that contract;

(iii) who works as a contracted employee for a qualifying employer in a position or providing services which, under applicable State law, cannot be filled or provided by a direct employee of the qualifying employer.

(10) Foreign Terrorist Organizations mean organizations on the list published under paragraph (a)(2)(A)(ii) under the Immigration and Nationality Act (8 U.S.C. 1189).

(11) Full-time means:

(i) Working in qualifying employment in one or more jobs--

(A) A minimum average of 30 hours per week during the period being certified,

(B) A minimum of 30 hours per week throughout a contractual or employment period of at least 8 months in a 12-month period, such as elementary and secondary school teachers and professors and instructors, in higher education, in which case the borrower is deemed to have worked full time; or

(C) The equivalent of 30 hours per week as determined by multiplying each credit or contact hour taught per week by at least 3.35 in non-tenure track employment at an institution of higher education.

(12) Illegal discrimination means a violation of any Federal discrimination law including, but not limited to, the Civil Rights Act of 1964 (42 U.S.C. 1981 et seq.), Americans with Disabilities Act (42 U.S.C. 12101 et seq.), and the Age Discrimination in Employment Act of 1967 (29 U.S.C. 621 et seq.).

(13) Law enforcement means service that is publicly funded and whose principal activities pertain to crime prevention, control or reduction of crime, or the enforcement of criminal law.

(14) Military service means “active duty” service or “full-time National Guard duty” as defined in section 101(d)(1) and (d)(5) of title 10 in the United States Code and does not include active duty for training or attendance at a service school.

(15) Non-governmental public service means services provided by employees of a non-governmental qualified employer where the employer has devoted a majority of its full-time equivalent employees to working in at

least one of the following areas (as defined in this section): emergency management, civilian service to military personnel, military service, public safety, law enforcement, public interest law services, early childhood education, public service for individuals with disabilities or the elderly, public health, public education, public library services, school library, or other school-based services. Service as a member of the U.S. Congress is not qualifying public service employment for purposes of this section.

(16) Non-tenure track employment means work performed by adjunct, contingent or part time faculty, teachers, or lecturers who are paid based on the credit hours they teach at institutions of higher education.

(17) Other Federal Immigration laws mean any violation of the Immigration and Nationality Act (8 U.S.C. 1105 et seq.) or any other Federal immigration laws.

(18) Other school-based services mean the provision of services to schools or students in a school or a school-like setting that are not public education services, such as school health services and school nurse services, social work services in schools, and parent counseling and training.

(19) Peace Corps position means a full-time assignment under the Peace Corps Act as provided for under 22 U.S.C. 2504.

(20) Public education service means the provision of educational enrichment or support to students in a public school or a public school-like setting, including teaching.

(21) Public health means those engaged in the following occupations (as those terms are defined by the Bureau of Labor Statistics): physicians, nurse practitioners, nurses in a clinical setting, health care practitioners, health care support, counselors, social workers, and other community and social service specialists.

(22) Public interest law means legal services that are funded in whole or in part by a local, State, Federal, or Tribal government.

(23) Public library service means the operation of public libraries or services that support their operation.

(24) Public safety service means services that seek to prevent the need for emergency management services.

(25) Public service for individuals with disabilities means services performed for or to assist individuals with disabilities (as defined in the Americans with Disabilities Act (42 U.S.C. 12102)) that is provided to a person because of the person's status as an individual with a disability.

(26) Public service for the elderly means services that are provided to individuals who are aged 62 years or older and that are provided to a person because of the person's status as an individual of that age.

(27) Qualifying employer means:

(i)(A) A United States-based Federal, State, local, or Tribal government organization, agency, or entity, including the U.S. Armed Forces or the National Guard;

(B) A public child or family service agency;

(C) An organization under Section 501(c)(3) of the Internal Revenue Code of 1986 that is exempt from taxation under Section 501(a) of the Internal Revenue Code;

(D) A Tribal college or university; or

(E) A nonprofit organization that--

(1) Provides a non-governmental public service as defined in this section, attested to by the employer on a form approved by the Secretary; and

(2) Is not a business organized for profit, a labor union, or a partisan political organization; and

(ii) Does not include organizations that engage in activities such that they have a substantial illegal purpose, as defined in this section.

(28) Qualifying repayment plan means:

(i) An income-driven repayment plan under Sec. 685.209;

(ii) The 10-year standard repayment plan under Sec. 685.208(b) or the consolidation loan standard repayment plan with a 10-year repayment term under Sec. 685.208(c); or

(iii) Except for the alternative repayment plan, any other repayment plan if the monthly payment amount is not less than what will have been paid under the 10-year standard repayment plan under Sec. 685.208(b).

(29) School library services mean the operations of school libraries or services that support their operation.

(30) Substantial illegal purpose means:

(i) aiding or abetting violations of 8 U.S.C. 1325 or other Federal immigration laws;

(ii) Supporting terrorism, including by facilitating funding to, or the operations of, cartels designated as Foreign Terrorist Organizations consistent with 8 U.S.C. 1189, or by engaging in violence for the purpose of obstructing or influencing Federal Government policy;

(iii) Engaging in the chemical and surgical castration or mutilation of children in violation of Federal or State law;

(iv) Engaging in the trafficking of children to another State for purposes of emancipation from their lawful parents in violation of Federal or State law;

(v) Engaging in a pattern of aiding and abetting illegal discrimination; or

(vi) Engaging in a pattern of violating State laws as defined in paragraph (b)(34) of this section.

(31) Surgical castration or mutilation means surgical procedures that attempt to transform an individual's physical appearance to align with an identity that differs from his or her sex or that attempt to alter or remove an individual's sexual organs to minimize or destroy their natural biological functions.

(32) Terrorism is defined under 18 U.S.C. 2331.

(33) Trafficking means transporting a child or children from their State of legal residence to another State without permission or legal consent from the parent or legal guardian for purposes of emancipation from their lawful parents or legal guardian, in violation of applicable law.

(34) Violating State law means a final, non-default judgment by a State court of:

(i) Trespassing;

(ii) Disorderly conduct;

(iii) Public nuisance;

(iv) Vandalism; or

(v) Obstruction of highways.

(35) Violence for the purpose of obstructing or influencing Federal Government policy means violating any part of 18 U.S.C. 1501 et seq. by committing a crime of violence as defined under 18 U.S.C. 16.

(c) * * *

(2) Except as provided in paragraph (c)(4) of this section, a borrower will be considered to have made monthly payments under paragraph (c)(1)(iii) of this section by-- * * * * *

(4) Effective on or after July 1, 2026, through a standard as described in paragraph(h)of this section, no payment shall be credited as a qualifying payment for any month subsequent to a determination that a qualifying employer engaged in activities enumerated in paragraph (b)(30) such that it has a substantial illegal purpose, as described in this section. * * * * *

(e) * * *

(9) If the Secretary has notified the borrower's employer that the employer may no longer satisfy the definition of qualifying employer set forth in paragraph (b)(28) of this section, pending a determination made under paragraph (h) of this section, the Secretary notifies the borrower of the potential change in the employer's status.

(10) If the Secretary has determined the borrower's employer has ceased to be a qualifying employer as a result of a determination made under paragraph(h) of this section, the Secretary notifies the borrower of the change in the employer's status. * * * * *

(g) * * *

(7) Notwithstanding paragraph (g)(1) of this section, a borrower may not request reconsideration under this paragraph (g) based on the Secretary's determination that the organization lost its status as a qualifying employer due to engaging in activities that have a substantial illegal purpose under the standard described in paragraph (h) of this section.

(h) Standard for determining whether a qualifying employer has a substantial illegal purpose.

(1) The Secretary determines by a preponderance of the evidence, and after notice and opportunity to respond (which is referred to as the “employer reconsideration process”), that a qualifying employer has engaged on or after July 1, 2026, in illegal activities such that it has a substantial illegal purpose by considering the materiality of any illegal activities or actions as described in paragraph (b)(30) of this section. In making such a determination, the Secretary shall presume that any of the following is conclusive evidence that the employer engaged in activities enumerated in paragraph (b)(30):

(i) A final judgment by a State or Federal court, whereby the employer is found to have engaged in illegal activities that have a substantial illegal purpose;

(ii) A plea of guilty or nolo contendere, whereby the employer admits to have engaged in illegal activities that have a substantial illegal purpose or pleads nolo contendere to allegations that the employer engaged in illegal activities that have substantial illegal purpose; or

(iii) A settlement that includes admission by the employer that it engaged in illegal activities that have a substantial illegal purpose described in paragraph (h) of this section.

(2) Nothing in this paragraph (h)(2)shall be construed to authorize the Secretary to determine an employer has a substantial illegal purpose based upon the employer or its employees exercising their First Amendment protected rights, or any other rights protected under the Constitution.

(i) Process for determining when a qualifying employer engaged in activities such that it has a substantial illegal purpose.

(1) The Secretary will determine that a qualifying employer violated the standard under paragraph (h) of this section when the Secretary:

(i) Receives an application as referenced under paragraph (e) of this section in which the employer fails to certify that it did not participate in activities that have a substantial illegal purpose; or

(ii) Determines that the qualifying employer engaged in activities such that it has a substantial illegal purpose under paragraph (h) of this section, unless, prior to the issuance of the Secretary's determination, the Secretary includes the factors set forth in paragraph (j)(2) of this section.

(2) Notwithstanding paragraph (i)(1) of this section, the Secretary shall, in the event an employer is operating under a shared identification number or other unique identifier, consider the organization to be separate if the employer is operating separately and distinctly, for the purposes of determining whether an employer is eligible.

(j) Regaining eligibility as a qualifying employer. An organization that loses eligibility for failure to meet the conditions of paragraph (b)(27) of this section may regain eligibility to become a qualifying employer after--

(1) 10 years from the date the Secretary determines the organization engaged in activities such that it has a substantial illegal purpose in accordance with paragraph (h) of this section, if, at or after that time, the organization certifies on a borrower's subsequent application that the organization is no longer engaged in activities that have a substantial illegal purpose as defined in paragraph (b)(30) of this section; or

(2) The Secretary approves a corrective action plan signed by the employer that includes--

(i) a certification by the employer that it is no longer engaging in activities that have a substantial illegal purpose as defined in paragraph (b)(30) of this section;

(ii) a report describing the employer's compliance controls that are designed to ensure that the employer does not continue to engage in activities that have a substantial illegal purpose as defined in paragraph (b)(30) of this section in the future; and

(iii) any other terms or conditions imposed by the Secretary designed to ensure that employers do not engage in actions or activities that have a substantial illegal purpose.

(k) Borrower notification of regained eligibility. If an employer regains eligibility under paragraph (j) of this section, the Secretary shall update the qualifying employer list, which is accessible to borrowers for purposes of certification or application.

[FR Doc. 2025-19729 Filed 10-29-25; 8:45 am] BILLING CODE 4000-01-P