A student loan forgiveness program will temporarily become easier to access for teachers and other public servants, the Biden administration announced on Oct. 6.
Borrowers who have worked for 10 years in a qualifying job and have made 120 on-time payments will now be eligible for student debt relief through the Public Service Loan Forgiveness program, regardless of what kind of federal loan or repayment plan they have. Previous loan payments that were ineligible for the program because of the payment plan or the lender will now count, including payments made through the now-defunct Federal Family Education Loan Program.
These relaxed requirements will remain in effect through October 2022.
The U.S. Education Department estimates 22,000 borrowers will be immediately eligible for loan forgiveness, and an additional 27,000 could become eligible if they obtain certification for past loan payments. In total, the agency said, more than 550,000 borrowers will move closer to forgiveness.
“Today we breathe a collective sigh of relief as the Kafkaesque system that dashed the dreams of far too many finally starts to be dismantled,” said AFT President Randi Weingarten.
The AFT and the UFT have lobbied for years to revamp the Public Service Loan Forgiveness program. In July 2019, the AFT, Weingarten and eight AFT members who said they were wrongly denied debt cancellation through the program sued then-Education Secretary Betsy DeVos and the U.S. Education Department alleging mismanagement of the program. A legally binding settlement announced on Oct. 13 will give public servants who have been denied loan cancellation a case review and credit for years of past payments, bolstering President Biden’s temporary measures.
The Public Service Loan Forgiveness program was created in 2007 to encourage college graduates to pursue careers in public service, but its stringent and complex requirements for qualification have muted its impact. Since the program launched, more than 90% of applicants have been rejected and only 5,500 borrowers have seen their debts forgiven.
Borrowers who wish to benefit from the temporarily expanded access must submit an application verifying their employment in the public sector by Oct. 31, 2022. Borrowers with the Federal Family Education Loan Program will have to consolidate into the Direct Loan program.
Retirees who made 10 years’ worth of payments while working in the public sector are also eligible.
Though the relaxed eligibility is temporary, the Education Department is working on a more permanent fix. The plan to overhaul federal student aid and debt relief programs began with public hearings in early October.
The Washington Post, Oct. 6
Public servants, including public school educators and nurses, may be on their way to a reduction or elimination of their crushing burden of debt thanks to a landmark settlement announced Oct. 13 between the U.S. Department of Education and the American Federation of Teachers, which filed a lawsuit in July 2019 alleging mismanagement of the Public Service Loan Forgiveness Program.