A Big Win for PSLF and a Big Shift in Repayment

July opened with two major student loan headlines: a court win for Public Service Loan Forgiveness borrowers and the official start of the new federal repayment framework.

The biggest news for public service workers is that two federal judges blocked the Department of Education from implementing a new PSLF rule that would have allowed certain nonprofit or public-service employers to be excluded from PSLF eligibility based on the government’s determination that the organization had a “substantial illegal purpose.” The rule was tied to a prior executive order and was scheduled to take effect on July 1, 2026. Instead, the courts stopped the rule before implementation.

For borrowers pursuing PSLF, this is important because the core PSLF pathway remains intact: eligible borrowers may still work toward forgiveness after 120 qualifying monthly payments while employed full-time by a qualifying government or nonprofit employer. The court decisions do not eliminate the need to keep employment certified, remain in an eligible repayment plan, and continue monitoring qualifying payment counts, but they do help preserve PSLF access for public service borrowers who were concerned that employer eligibility could become more uncertain.

At the same time, July 1 also marked the launch of major repayment changes. The Department of Education has confirmed that borrowers can now access the new Repayment Assistance Plan, known as RAP, and the new Tiered Standard repayment plan. RAP is income-based and considers income and dependents, while Tiered Standard creates fixed repayment terms of 10, 15, 20, or 25 years based on loan balance.

SAVE borrowers are also beginning to receive notices telling them they must select a new repayment plan. Notices are being sent in waves, and borrowers generally receive a 90-day window after notice to make a selection. Borrowers who do not actively choose a new plan may be moved into a standard or tiered repayment option, which may not be the most affordable or strategic choice for their situation.

The takeaway: PSLF borrowers received important legal protection, but the repayment landscape is still changing quickly. Borrowers should not assume that an old plan, old recommendation, or previously prepared document still reflects the best available path after July 1.

What This Means for You

If you are pursuing PSLF, currently enrolled in SAVE, or trying to decide which repayment plan to choose under the new July 1 rules, now is the time to review your strategy. A court win may help protect PSLF access, but repayment decisions still need to be made carefully.

Log back into your SDS account to review your current plan, confirm your next step, and make sure your repayment strategy reflects the newest federal guidance.