Federal Judge Strikes Down Education Dept.’s New PSLF Employer Rule

A federal judge has thrown out the Department of Education's controversial new Public Service Loan Forgiveness rule, ruling it unlawful one day before it was scheduled to take effect.In a 68-page decision issued June 30, 2026, U.S. District Judge Myong J. Joun of the District of Massachusetts (PDF File) held that the rule was "contrary to law," exceeded the Department's statutory authority, was "arbitrary and capricious," and violated the First Amendment.His order vacated the rule entirely.There's another case in the District of Columbia that's also about this same rule, still waiting on a ruling as of writing.

The two largest faculty unions in the country are drawing a line against three-year bachelor's degrees, just as more states moves to make them real.The American Association of University Professors (AAUP) and the American Federation of Teachers (AFT) issued a joint statement opposing accelerated degrees after Massachusetts approved its first pilot programs. The pushback lands the same week Virginia and Ohio announced a partnership to design their own shorter pathways.It follows a trend of over 60 colleges and university systems working on building three year degree programs.

Syracuse University Chancellor J. Michael Haynie told the community last week that it will not hit its undergraduate enrollment target for the fall and, as a result, will run a budget deficit "something the University has not experienced in quite some time."His letter framed the shortfall as the product of national forces: a shrinking pool of 18-year-olds, fierce competition for students, and a drop in international applications tied to visa problems and federal policy.While that backdrop is true, we believe it to be only partly responsible for Syracuse's downfall. Haynie's letter casts the deficit as the "new normal" for "even strong, well-resourced universities" — a framing that quietly recasts a Syracuse problem as everyone's problem.Syracuse spent the past several years making a series of financial and communication decisions that alienated the very families it now needs. Plenty of peer schools face the same demographic and policy headwinds, but have been seeing record applications and normal enrollment.The "new normal" is true and smaller private universities do face headwinds and risks, but much of what Syracuse is facing is self-inflicted.

The future of student loan repayment for SAVE borrowers has been finalized by a court settlement, and the exodus will start on July 1, 2026 in tranches of individual borrowers.According to the most recent communication from the Department of Education, student loan servicers will begin sending official notices to borrowers in SAVE starting July 1, 2026. These notices will come in tranches, roughly two weeks apart. Once a borrower receives their notice, they will have 90 days to select a new repayment plan. The current available repayment plan options are:StandardTiered Standard (launches on July 1)IBRRAP (launches on July 1)PAYE (ends in 2028)ICR (ends in 2028)When pressed on the final end date for all borrowers, we couldn't get an exact answer.This timeline aligns with our earlier expectation we placed of 70% likelihood that a move would happen July 1

Robert joined the Money Life Show with Chuck Jaffe to talk about the latest updates with student loans: new repayment plan changes and new student loan limits that go into effect this week.If you have student loans, or are planning on borrowing student loans, here's what you need to know.Check out the Money Life Show with Chuck Jaffe here.

A coalition of states is pressing a federal judge (PDF File) to halt the Department of Education's new Public Service Loan Forgiveness (PSLF) rule before it takes effect July 1, 2026. This comes after the Department moved to add a sworn attestation to the program's certification forms in a Federal Register notice (PDF File).The new rule lets the Secretary of Education strip PSLF eligibility from employers (including state and local governments) that the Department decides have a "substantial illegal purpose." The form change would require employers to confirm, under penalty of perjury, that they have not engaged in such activity. For more millions of public service workers, an employer's disqualification can mean losing access to loan forgiveness.PSLF has canceled more than $85 billion in federal student loans for over one million borrowers since the program began. The Department estimates the revised certification form covers roughly 913,713 responses a year.

The U.S. Department of Education announced that its quadrupling the interest rate discount for federal student loan borrowers who enroll in autopay, raising it from 0.25% to a full 1 percentage point starting July 1, 2026.Borrowers who sign up for automatic payments (or who are already enrolled) will get a 1% reduction on their federal student loan interest rate. The discount is temporary: borrowers who enroll by September 30, 2026 (or are already enrolled) keep the benefit through June 30, 2028.Already on autopay? You don't need to do anything. Loan servicers will automatically apply the extra 0.75% on top of the existing 0.25% discount.

Rep. Suzanne Bonamici (D-OR) announced she will introduce a resolution to impeach Secretary of Education Linda McMahon, accusing her of illegally gutting the Department of Education by shifting more than 100 programs to other federal agencies without congressional approval.The resolution alleges McMahon violated her oath of office, made false and misleading statements to Congress, and broke federal law by transferring the operations of multiple offices to agencies outside the Department — actions Bonamici says only Congress has the power to authorize.

Student loan servicers have started placing automated phone calls to SAVE borrowers, warning them that their loans will reenter repayment when the forbearance ends and that they'll need to pick a new plan or one will be chosen for them.Some borrowers have begun shared transcripts of the messages online. One automated message from Nelnet tells borrowers their "loans will reenter repayment when the SAVE plan ends" and that they "will need to choose a new repayment plan. If you don't choose a plan, one will be assigned for you."The call points borrowers to StudentAid.gov, notes that the new Repayment Assistance Plan (RAP) "becomes available starting July 1st," and reminds those enrolled in auto-debit that payments will pull automatically even if they don't select a plan and default to Standard.

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