Student Loan Forgiveness: New Rules for 2023 Strengthen Chances To Qualify
The Biden administration announced on Oct. 25 executive actions that will bring most loans managed by the Education Department “closer to forgiveness,” the Department of Education declared. One such action: credit toward the Public Service Loan Forgiveness (PSLF) Program for borrowers who have qualifying employment.
The PSLF Program forgives the remaining balance on Direct Loans after borrowers have made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer, according to the Education Department.
The new actions will provide borrowers with many of the same benefits going to those who have applied for PSLF under the temporary changes — the “Limited PSLF Waiver” — before its Oct. 31, 2022 end date, the department indicated in a press release.
“I’m incredibly proud that the Biden-Harris team’s temporary changes to Public Service Loan Forgiveness helped over 236,000 teachers, nurses, veterans, government employees and other public service workers secure more than $14 billion in debt relief,” Secretary of Education Miguel Cardona was quoted as saying in an Oct. 25 press release. “Today, we’re encouraging public service workers to take advantage of the program’s temporary changes before the deadline on October 31. At the same time, we’re taking bold steps that will automatically move more hardworking public service workers closer to forgiveness and making permanent changes to reduce the red tape that riddled the PSLF program. The Biden-Harris team is as committed as ever to upholding the promise of PSLF and ensuring borrowers who devote their careers to teaching our children, strengthening our communities, and serving our nation get the relief they’ve earned.”
The final regulations the department announced, which will be implemented July 1, 2023, “will reduce regulatory barriers that have historically made it harder for borrowers to make progress toward PSLF forgiveness.”
These regulations will allow borrowers to receive credit toward PSLF on payments that are made late, in installments, or in a lump sum, while prior rules only counted a payment as eligible if it was made in full within 15 days of its due date, according to a fact sheet.
In addition, as of July, certain periods in deferment or forbearance toward PSLF will be counted, including cancer treatment deferment or military service deferment, or economic hardship deferment.
The new rules will also simplify the criteria to help borrowers certify employment and provide opportunities to correct problems, according to the fact sheet.
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