Dept of Education Overhauls Student Loan Forgiveness Program
The U.S. Department of Education announced major changes to a federal student loan forgiveness program that could bring relief to more than 550,000 borrowers working in government and nonprofit sectors, including around 22,000 borrowers who will automatically be eligible for student loan forgiveness without needing to take additional steps.
Through the Public Service Loan Forgiveness program, the government forgives remaining federal student loan debt for qualifying public-sector workers after they have made monthly payments for 10 years.
The student loan forgiveness program has long been criticized for being difficult to navigate, with borrowers receiving little help from their loan servicers, the companies that handle billing, and other services. Many borrowers have said they found out they weren’t eligible for forgiveness only after making what they thought was a decade’s worth of qualifying payments.
The Public Service Loan Forgiveness Program was meant to wipe clean students’ debt in return for a decade of public service. But in practice, a group of military lawyers tell Lesley Stahl they got lost in a maze of rules and red tape. https://t.co/pipQIHnaCf pic.twitter.com/2dp4BsUH5e
— 60 Minutes (@60Minutes) September 30, 2021
In an announcement Wednesday, the Education Department said it will “restore the promise” of the debt relief program through a series of actions that will be implemented “over the coming months,” according to an agency memo. These actions include offering a time-limited waiver, which will continue through October 31, 2022, and authorize “all prior payments” from student borrowers to count towards the program, including loan types and payment plans that didn’t previously qualify for forgiveness.
— Eoin Higgins (@EoinHiggins_) October 5, 2021
Wednesday’s announcement also includes a commitment to helping military service members and federal employees access the Public Service Loan Program’s resources.
BREAKING: President Biden announces that he’ll provide loan forgiveness to hundreds of thousands of college graduates who work in public service and were denied relief by Betsy DeVos and the Trump Education Department, who rejected over 90% of applicants. RT IF YOU SUPPORT THIS!
— Occupy Democrats (@OccupyDemocrats) October 6, 2021
More than 1 million borrowers have made at least one qualifying payment, but only a small percentage of those enrolled have received forgiveness. Roughly 5,500 people have seen their debt wiped away, according to the latest government data.