Public Service Student Loan forgiveness may be available to teachers, firefighters, and other government workers, even if the loan was previously denied.
Although it has not fulfilled all its campaign promises, President Joe Biden’s administration made some progress in student loan forgiveness. The Department of Education declared last month that it had forgiven loans for over 70,000 borrowers, to the tune of almost $5 billion, since reorganizing its Public Service Loan Forgiveness Program in October 2021. These numbers surpass the initial estimate of 22,000 borrowers and $1.7 billion of loan debt.
The PSLF program was launched in 2007 to assist public servants with paying off loans more quickly. However, nearly 99% of the borrowers who applied since 2008 were denied.
Some restrictions have been temporarily removed under the Limited PSF Waiver program. This gives new borrowers an opportunity for forgiveness. Past payments can also be counted towards forgiveness. This waiver extends beyond federal direct loans which were the only ones that could be eligible for PSLF. It also applies to borrowers who have other federal loans such as FFEL and federally backed loans made through Perkins loans or private lenders. It also applies to borrowers with non-standard repayment plans. The waiver is only for federal loans. However, they make up more than 90% of student loan debt.
Is this a student loan forgiveness program that you are eligible for? How do you apply if you’re eligible? This is everything you need about the PSLF.
What are the modifications to the Public Service Loan Forgiveness Program?
The Department of Education makes it easier for borrowers and their families to apply for benefits. This includes making it easier to spot and correct potential errors made in loan servicing — and increasing the number of loans that are eligible for forgiveness. The department also stated that the department will focus on improving benefits for military personnel, such as converting active duty time into loan repayment.
A key change is the introduction of a limited waiver. This new tool gives borrowers one year to apply under the new terms and significantly expands eligibility. Before last week’s announcement, there was not much to appeal the rejection of a PSLF request and only 5% of people who applied for PSLF received debt forgiveness.
This waiver allows borrowers to consolidate non Direct federal loans previously not eligible for the program. Some borrowers who borrowed Federal Family Education Loans had been told that they were not eligible for the PSLF. However, they can now request forgiveness under the limited waiver. This means that some borrowers are now eligible for credit for payments or periods of employment, such as active military service, that they weren’t able to get before.
Who qualifies for PSLF?
PSLF is only available to those who are employed full-time in a US federal, state, or local government agency. This includes the military. Direct loans and other federally backed loans must be consolidated into direct loans. You also must make 120 qualifying payments (10 years’ worth) PSLF is available to qualified borrowers who are firefighters, teachers, and nurses who provide services in their communities.
Who is eligible for additional debt forgiveness under new PSLF terms?
PSLF extended the eligibility of borrowers by making more types and payment plans eligible for forgiveness. However, the number of borrowers who are allowed to apply is still restricted to workers in the public sector. Additional forgiveness may be available to borrowers who are already eligible for the PSLF. You can meet the eligibility requirements in a few ways.
Applying for the waiver limited is the best way to find out your eligibility. The waiver can be used to consolidate loans and to certify prior employment periods for credit.
Even if your monthly student loan payments were suspended during the pandemic you are still eligible for additional PSLF relief. Each paused payment counts towards your goal. If your payments were halted for 22 consecutive months, this counts as 22 on-time payments.
How do I apply for forgiveness from the PSLF?
To assist you in submitting your limited waiver application, the Department of Education offers a dedicated tool. You have until Oct. 31, 2022, to apply for the waiver. However, it is a good idea that you confirm all details in advance.
What happens if I make payments and don’t get credit?
If you were making payments and your loan servicer did not have accurate records, there was little to no recourse against them. With the exception of the waiver, you may apply for forgiveness and have your payments count towards your debt forgiveness.
What happens if I take out loans that aren’t eligible for PSLF?
PSLF was previously only available to Direct Loans that had a standard or income-driven payment plan. For a limited period, however, credit may be available for payments made on federal loans previously not eligible for PSLF. Borrowers with FFEL or Perkins federal loans might need to consolidate their loans using the Direct consolidation program prior to Oct. 31, 2022.
What are other policy changes I should be aware of?
In a statement, the Department of Education stated that it would continue to update and roll out its policies over the next few months to help get the PSLF program on track.
