Ed. Dept. Overhauls PSLF Program; Up to 550k Borrowers Impacted

The Department of Education yesterday announced major changes to the Public Service Loan Forgiveness Program that will see 22,000 individuals become immediately eligible for the program and an estimated 550,000 individuals move a lot closer to having their student loans wiped away.

Under the PSLF, individuals who spend 10 years working in certain types of jobs — such as for nonprofit organizations or the government — and made on-time student loan payments would have their remaining debt forgiven. But problems with the program led to 98% of applicants being rejected — largely because students had loans that were not allowed to be forgiven. But the Education Department yesterday announced the offer of a waiver that will allow those loans to be included in the program.

The 22,000 individuals who will have $1.74 billion in student loan debts wiped out are more than the 16,000 individuals who have been approved for forgiveness during the life of the program, which dates back to 2007.

“Borrowers who devote a decade of their lives to public service should be able to rely on the promise of Public Service Loan Forgiveness. The system has not delivered on that promise to date, but that is about to change for many borrowers who have served their communities and their country,” said Secretary of Education Miguel Cardona, in a statement. “Teachers, nurses, first responders, servicemembers, and so many public service workers have had our back especially amid the challenges of the pandemic. Today, the Biden Administration is showing that we have their backs, too.”

To be eligible, individuals will have to submit PSLF applications before October 31, 2022.

The Education Department said it would also go back and review applications that had been rejected to see if they are eligible to be approved under the limited waiver process.

The move is yet another from the Biden administration aimed at eliminating student loan debt. This announcement marks the latest in a series of steps that the federal government has taken to discharge more unpaid student loans.

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