The Biden administration is stepping up efforts to encourage borrowers to apply for a student loan forgiveness initiative before it expires in October.
The initiative — a temporary extension of a student loan forgiveness program for borrowers working in the public service — has already resulted in more than $8 billion in approved student loan forgiveness for thousands of borrowers, according to the Ministry of Education. But advocates fear many other borrowers will realize they are entitled to relief.
Student Loan Forgiveness for Public Service Workers Through Temporary Waiver
The Public Service Loan Forgiveness Program (PSLF) was enacted by Congress in 2007 to provide student loan forgiveness to borrowers who commit to work in the public service. Borrowers who work 10 or more years in nonprofit or government jobs while meeting other program requirements may have their entire federal student loan balance forgiven under the program.
But since its enactment, the PSLF has been mired in problems due to complex eligibility rules, administrative problems and poor oversight. As a result, approval ratings hovered between one and two percent for years.
The Biden administration announced a temporary solution to the PSLF’s problems in October. Through the Limited PSLF Waiver, the Department of Education temporarily relaxed some of the program’s strict rules to retroactively count prior loan periods that otherwise would not qualify for PSLF, including payments made under the “wrong” repayment plan or the “wrong” type of federal loan. student loan. The administration went even further in April to allow certain past adjournment and abstention periods to also count towards the PSLF.
But the Limited PSLF Waiver program is only available for a relatively short period of time – and that deadline is sending out soon, with an expiration date of October 31 approaching. Advocates are increasingly concerned that millions of borrowers may not be aware of the PSLF’s limited relief opportunity, especially in light of the continued student loan pause on payments, which is now entering its third year.
Biden officials step up efforts to notify borrowers of opportunity to forgive student loans
As the October deadline approaches, Education Department officials are stepping up efforts to notify borrowers of the soon-to-expire limited PSLF waiver.
“By October 31, a limited PSLF waiver temporarily modifies the program rules” for PSLF, Undersecretary James Kvaal said in a mass email to direct loan borrowers this month. “Spread the word to your colleagues, friends and family who work in the public service…Tell them to act before October 31!”
“The #PSLF The waiver simplified the process of obtaining loan forgiveness. But you have to be registered by October,” Education Secretary Miguel Cardona warned in a Tweeter this week. “I encourage everyone – even if you’ve already been turned down or used other benefits – to apply.”
Last month, the Department of Education said it had already approved $8.1 billion in new pardons for students under the waiver initiative. But student loan advocates are increasingly sounding the alarm and have urged the Biden administration to extend the waiver. The Student Borrower Protection Center (SBPC) released data last month suggesting the program may be underutilized, with millions in student loan forgiveness remaining on the table.
In a press call last week, Kvaal said Biden administration officials “continue to evaluate the PSLF waiver…My advice would be for borrowers to apply by October 31, 2022 for s ensure that they benefit from the advantages of the derogation”.
How to Apply for Student Loan Forgiveness Through Waiver
Here’s how to pursue the Limited PSLF Waiver initiative:
- Review current information from the Ministry of Education tips about the limited PSLF Waiver program, with includes a detailed FAQ section.
- Borrowers who already have direct federal student loans and who have already certified their public service employment may not need to take action. Borrowers who need to certify or re-certify their PSLF employment by completing the required PSLF employment certification forms can use the Ministry of Education PSLF Helper Tool.
- The Department of Education says borrowers with FFEL loans or Perkins loans (which are temporarily eligible for PSLF relief under the waiver initiative) should consolidate those loans through the Federal Direct Consolidation Program before the deadline of October 31, 2022 to benefit from it. “Pre-consolidation loan repayment periods matter” under the limited PSLF waiver initiative, the Department says, unlike the original PSLF program rules. Borrowers can consolidate online via the Department’s website. Be sure to review the advantages and disadvantages of consolidation before proceeding, and the borrower should be aware that the consolidation process can take 30 to 60 days, and sometimes longer.
- FFEL borrowers must first verify that they have qualifying employment (using the PSLF assistance tool), before consolidating. If their job qualifies, FFEL borrowers can then proceed to direct loan consolidation. Once their loans are consolidated, they can submit their PSLF employment certification forms to MOHELA, the new PSLF loan manager under contract with the Ministry of Education.
Further Reading on Student Loans
A new proposal would speed up student loan forgiveness for public service borrowers – but its fate is uncertain
3 Key Student Loan Forgiveness Opportunities Could End Soon – Here’s How to Apply
If You’ve Been To These Schools, You May Qualify For Student Loan Forgiveness: Here’s What To Do
Biden Reportedly Close to Making a Decision on Widespread Student Loan Forgiveness – Here’s Where It Stands