Department of Education Announces Overhaul of Public Service Loan Forgiveness Program
The Department of Education announced an overhaul of its Public Service Loan Forgiveness Program (PSLF) today, through a series of actions, according to an announcement.
The set of actions over the coming months, “will restore the promise of PSLF,” according to the announcement.
The Department said it will offer a time-limited waiver so that student borrowers can count payments from all federal loan programs or repayment plans toward forgiveness, including loan types and payment plans that were not previously eligible. The limited waiver will help more than 550,000 borrowers who had previously consolidated their loans see their progress toward PSLF grow automatically, with the average borrower receiving 23 additional payments.
This includes approximately 22,000 borrowers who will be immediately eligible to have their federal student loans discharged without further action on their part, totaling $1.74 billion in forgiveness, according to the announcement.
Another 27,000 borrowers could potentially qualify for $2.82 billion in forgiveness if they certify additional periods of employment.
In addition, the Department said it will “pursue opportunities” to automate PSLF eligibility, give borrowers a way to get errors corrected and make it easier for members of the military to get credit toward forgiveness while they serve.
“These changes are important steps toward a better and stronger PSLF program, one that will move away from the current situation in which too few borrowers receive forgiveness, and too many do not receive credit for years of payments they made because of complicated eligibility rules, servicing errors or other technicalities,” the department said in the announcement.
“As Co-Chair of the #PSLF Program Caucus, I welcome today’s announcement by the @usedgov. We need to do more to help those struggling with student debt,” Representative Brendan Boyle tweeted.
Another step will address challenges service members face in accessing PSLF, by allowing months spent on active duty to count toward PSLF.
“This change ensures that members of the military will not need to focus on their student loans while serving our country. Federal Student Aid will develop and implement a process to address periods of student loan deferments and forbearance for active-duty service members and will update affected borrowers to let them know what they need to do to take advantage of this change,” according to the statement.
In addition, next year, the Department will begin automatically giving federal employees credit for PSLF by matching Department of Education data with information held by other federal agencies about service members and the federal workforce.
“To date, approximately 110,000 federal employees and 17,000 service members have certified some employment toward PSLF. These matches will help the Department identify others who may also be eligible but cannot benefit automatically, like those with FFEL [Family Federal Education Loan] loans,” according to the announcement.