Are You Eligible For Public Service Loan Forgiveness Program?
The U.S. Department of Education (ED) rolled out a series of changes to the Public Service Loan Forgiveness Program (The U.S. Department of Education (ED) rolled out a series of changes to the Public Service Loan Forgiveness Program (PSLF) early in October. The changes in this program will also changethe requirements for eligibility that can possibly help give more access to more people.
The PSLF is allowing borrowers with federal direct loans who make 120 qualifying monthly payments while working a full-time job for a qualifying employer to have the remaining balance forgiven. The qualified employers include not-for-profit organizations, federal, local, state, or tribal governments.
A statement from the ED explains they will be offering a time-limited waiver as student borrowers can count the number of payments from all repayment plans or federal loan programs toward forgiveness. These payments include payment plans and loan types that were previously ineligible.
The new program will be automated to determine PSLF eligibility giving borrowers a means to correct their errors while making it easier for military members to get a forgiveness credit while they serve.
These changes compounded with an expanded communications campaign ensuring affected borrowers learn about these opportunities and encourage more to apply for assistance. The PSLF has previously been criticized for failing to live up to its purpose over the last couple of years.
The ED released data in 2018 that indicated 29,000 borrowers applied for student loan forgiveness with PSLF but only 96 applicants were eligible resulting in 99% of borrowers’ applications being rejected. Following the unsuccessful launch of the program, Congress authorized an expansion of the program but continued with little success.
The Government Accountability Office reported in 2019 that 99% of loan-forgiveness requests were rejected under the new program. The report indicated the ED processed roughly 54,000 requests for forgiveness only approved 661 applicants spending $27 million of the allotted $700 million Congress allocated for the extended program.
This resulted in changing the program again for more access for applicants with the goal of more people getting the much-needed financial assistance. The changes in this program will include a waiver with a deadline that is key for renewing or first-time applicants.
ED will be offering a limited waiver so borrowers can have their payments credited “regardless of the loan type or repayment plan.” This new waiver is estimated to offer 550,000 borrowers on average 23payments or closer to loan forgiveness along with 22,000 borrowers eligible for immediate cancellation.
ED wants to openly disclose this waiver is a “temporary opportunity” and borrowers who need to consolidate are required to submit an application with a PSLF form by the deadline of October 31, 2022,to count the previously ineligible payments. The Limited PSLF Waiver will be available for borrowers of student loans including Federal Family Education Loans and Perkins Loans (not private loans), and Direct Loans.
The new rules will also impact military members' eligibility as military service may be counted as payment as a borrower’s months spent on active duty can be counted towards the PSLF, even if the loans on forbearance or deferment rather than actively in payment. The PSLF program acknowledges that too often military members find out some forbearances or deferments can be granted while serving the country didn’t count towards PSLF.
The new changes ensure military members don’t need to focus on student loans while on duty in service. Another policy is in development for military members with assistance through Federal Student Aid (FSA) will implement and develop a process addressing the period of student loan forbearance and deferments for active-duty service members. The new changes will also update affected borrowers to let them know what they need to do to take advantage of these helpful changes.
The new program is promising but PSLF is a work in progress that will be changing through implementing new policies in the future. PSLF suggests checking for updates in the program by updating contact information on StudentAid.gov account or registering for a FAS ID.) early in October. The changes in this program will also change the requirements for eligibility that can possibly help give more access to more people.
The PSLF is allowing borrowers with federal direct loans who make 120 qualifying monthly payments while working a full-time job for a qualifying employer to have the remaining balance forgiven. The qualified employers include not-for-profit organizations, federal, local, state, or tribal governments.
A statement from the ED explains they will be offering a time-limited waiver as student borrowers can count the number of payments from all repayment plans or federal loan programs toward forgiveness. These payments include payment plans and loan types that were previously ineligible. The new program will be automated to determine PSLF eligibility giving borrowers a means to correct their errors while making it easier for military members to get a forgiveness credit while they serve.
These changes compounded with an expanded communications campaign ensuring affected borrowers learn about these opportunities and encourage more to apply for assistance. The PSLF has previously been criticized for failing to live up to its purpose over the last couple of years.
The ED released data in 2018 that indicated 29,000 borrowers applied for student loan forgiveness with PSLF but only 96 applicants were eligible resulting in 99% of borrowers’ applications being rejected. Following the unsuccessful launch of the program, Congress authorized an expansion of the program but continued with little success.
The Government Accountability Office reported in 2019 that 99% of loan-forgiveness requests were rejected under the new program. The report indicated the ED processed roughly 54,000 requests for forgiveness only approved 661 applicants spending $27 million of the allotted $700 million Congress allocated for the extended program.
This resulted in changing the program again for more access for applicants with the goal of more people getting the much-needed financial assistance. The changes in this program will include a waiver with a deadline that is key for renewing or first-time applicants.
ED will be offering a limited waiver so borrowers can have their payments credited “regardless of the loan type or repayment plan.” This new waiver is estimated to offer 550,000 borrowers on average 23payments or closer to loan forgiveness along with 22,000 borrowers eligible for immediate cancellation.
ED wants to openly disclose this waiver is a “temporary opportunity” and borrowers who need to consolidate are required to submit an application with a PSLF form by the deadline of October 31, 2022,to count the previously ineligible payments. The Limited PSLF Waiver will be available for borrowers of student loans including Federal Family Education Loans and Perkins Loans (not private loans), and Direct Loans.
The new rules will also impact military members' eligibility as military service may be counted as payment as a borrower’s months spent on active duty can be counted towards the PSLF, even if the loans on forbearance or deferment rather than actively in payment. The PSLF program acknowledges that too often military members find out some forbearances or deferments can be granted while serving the country didn’t count towards PSLF.
The new changes ensure military members don’t need to focus on student loans while on duty in service. Another policy is in development for military members with assistance through Federal Student Aid (FSA) will implement and develop a process addressing the period of student loan forbearance and deferments for active-duty service members. The new changes will also update affected borrowers to let them know what they need to do to take advantage of these helpful changes.
The new program is promising but PSLF is a work in progress that will be changing through implementing new policies in the future. PSLF suggests checking for updates in the program by updating contact information on StudentAid.gov account or registering for a FAS ID.