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Major improvements to the Public Service Loan Forgiveness Program announced

Photo credit: Getty.
By Pete Levine ·

The Biden administration on Wednesday announced a major overhaul of the Public Service Loan Forgiveness program

That includes a dramatic expansion of those eligible for it and reviews of previously rejected PSLF applications, which will result in immediate forgiveness for tens of thousands of borrowers and benefit an additional 550,000 borrowers with an average additional credit of another two years of payments.

Additional changes seek to make the program more accessible and transparent, including providing automatic credits for military service members and federal employees.

In a statement, AFSCME President Lee Saunders applauded the changes, saying, “Relief is here for our everyday heroes who have dedicated their lives to strengthening our communities. For too long, public service workers, many of whom could have earned more working in the private sector, encountered a maze of changing rules, unreliable loan servicers and zero accountability or assistance when seeking debt forgiveness.”

When the loan forgiveness program started in 2007, its goal was simple: encourage workers to pursue careers in public service. After 10 years of public service work, applicants – teachers, nurses, first responders, child welfare workers, librarians, mental health professionals, law enforcement officers and many other professionals – would have the balance of their student loans forgiven, provided they’d made on-time payments of their loans.

However, only a paltry few were ultimately given that relief because the task of applying for loan forgiveness was onerous, confusing and misleading.

Now, with the reforms that Biden’s Department of Education will impose over the next year, many are closer to loan relief.

Specifically, there will be a waiver (until Oct. 31, 2022) that allows all payments by student borrowers to count toward PSLF, regardless of their loan program or payment plan.

Previously, only timely payments made in full on direct federal loans were counted toward PSLF. With the new changes, payments made on loans from the Federal Family Education Loan (FFEL) Program, the Perkins Loan Program or other non-direct loans will be automatically counted toward PSLF if borrowers have already consolidated their loans into the direct loans. 

In addition, if borrowers have not consolidated their loans into a direct loan, they need to submit a PSLF form to the Department of Education by Oct. 31, 2022, to do this.

FFEL Parent PLUS loans are not eligible for the new waiver. The temporary changes only apply to people who borrowed for their own education – not for a child or grandchild.

Some 22,000 borrowers who have consolidated loans – including previously ineligible loans – will see immediate forgiveness. Another 27,000 borrowers could potentially qualify for an additional $2.82 billion in forgiveness if they certify additional periods of employment, which can be done online.

What’s more, the Department of Education will review denied PSLF applications for errors, and allow borrowers the ability to have their PSLF determinations reconsidered. Of the more than 1 million people who have made qualifying payments, only about 5,500 have seen their debt forgiven.

AFSCME has been deeply committed to this fight. Saunders said, “After years of pushing for Congress and past administrations to fix this program, AFSCME is elated that the courageous workers who keep our communities running every day will get the help they deserve.” 

Unsure if or where you fit in?

Find out if you qualify for additional payments or forgiveness. The Department of Education has posted a fact sheet outlining the new rules and how to find out if you qualify for additional payments.

More questions? Check out the Department of Education’s student loan online help center or contact them directly. 

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