100,000 Additional Public Servants Will Have Their Student Loan Debt Canceled Because of This Policy Change
You can add another 100,000-plus names to the list of student loan borrowers who will have their debt forgiven, following policy fixes made to the Public Service Loan Forgiveness (PSLF) program.
More than $6 billion in loans will be forgiven thanks to the fixes, CNBC reported, citing data from the U.S. Department of Education.
The PSLF, which dates to 2007, allows non-profit and government employees to have their federal student loans canceled after 10 years, or 120 payments. One-quarter of American workers could be eligible, according to estimates from the Consumer Financial Protection Bureau.
However, because of problems with the program, not that many eligible borrowers actually get relief. That should change thanks to PSLF reforms announced in 2021 by the Biden administration. Those changes include reassessing borrowers’ timelines and counting some payments that were previously ineligible.
Borrowers who want to get relief are advised to act quicky because the Biden administration’s new rules for public service loan forgiveness are set to expire Oct. 31, 2022.
Borrowers who have either a Federal Family Education Loan (FFEL) or a Federal Perkins Loan should consolidate them into direct loans with their servicers. Normally, Perkins and FFEL loans don’t qualify for public service loan forgiveness, but they were temporarily added by the Biden administration.
It typically takes 30 to 45 days for the consolidation to take place, according to higher education expert Mark Kantrowitz.
“Borrowers should do this even if they don’t expect to have 120 payments by the deadline, as the previously ineligible payments will count only if they do this,” he told CNBC.
Borrowers must also prove that their work was considered public service for time periods that they want to count toward forgiveness. You’ll need to file an employer certification form with your servicer for each job you’ve had throughout your timeline.
More than 100,000 student loan borrowers are expected to get PSLF relief. That comes on top of more than 66,000 borrowers who got their debt canceled or repaid following a $1.85 billion settlement earlier this year involving Navient, a student loan servicer accused of predatory and deceptive lending practices.
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