This Monday, the Department of Education declared that $42 billion in student loan debt has been accepted for forgiveness under the Public Service Loan Forgiveness (PSLF) program.
The big picture: Since October 2021, more than 615,000 borrowers have had their student debt forgiven, while tens of millions of others are awaiting the Supreme Court’s ruling on President Biden’s plan.
The Biden administration temporarily changed the PSLF in October 2021 to make it simpler for borrowers to qualify for forgiveness.
- Nearly 610,000 of the approximately 616,000 borrowers whose loans have been accepted for forgiveness through the program have already had their loans dismissed, “and the rest will soon follow,” the department said.
Other people in excess of two million “have an approved PSLF form and are on the path to forgiveness.” - According to the government, barely 7,000 borrowers had received approval for the PSLF program by the conclusion of the Trump presidency.
What we’re watching: Starting July 1, new rules will be in place to make it easier for borrowers to make progress toward the program and to certify employment that qualifies.
Who is qualified?
- The program is intended for those who work for non-profit organizations as well as public personnel including teachers, firefighters, and law enforcement officers.
- For people who have been in public service for 10 years and have made 120 qualifying monthly payments, the outstanding federal student loan balance is forgiven.
- The William D. Ford Federal Direct Loan program offers forgiveness on all federal student loans.
- To be eligible, borrowers possessing Federal Family Education Loans or Federal Perkins Loans must combine them into direct loans. However, payments made in the past on those loans will not be considered qualifying payments for the PSLF.
How to apply
- A significant upgrade allows borrowers to sign and submit their PSLF form electronically and check the progress of the form online.
- Additionally, the form may be printed and mailed.
Temporary changes to program rules
- A limited PSLF waiver was put in place for a brief period of time to allow borrowers to receive credit for prior payback periods that would not otherwise qualify. That application process was completed in October.
- A consolidation application that is due by the end of 2023 will give debtors who are employed by the government another chance to have their payment count boosted under a one-time account adjustment.
- Due to the modifications, borrowers with federally managed loans could still experience an increase in the number of payments that contribute toward income-driven repayment and PSLF forgiveness.
- Additionally, the Department earlier this year released proposed regulations that would make it possible for people to qualify for $0 monthly payments if their income is under $30,500, or under $62,400 in a family of four.