PHOENIX–(COMMERCIAL THREAD) – The US Department of Education is temporarily changing some rules to potentially allow hundreds of thousands of borrowers to qualify for a student loan forgiveness if they have worked in the public service. This opportunity is only available for a limited time and borrowers must act before October 31, 2022 to qualify.
âFor years, the civil service loan forgiveness program has been plagued by problems, resulting in frustrated and disappointed borrowers who thought they were progressing towards loan forgiveness only to find that they didn’t. were ineligible because they had the wrong type of loan or the wrong repayment plan. Said Jessica Ferastoaru, student loan specialist at Take Charge America, a non-profit student loan counseling agency. âWhile these changes are welcome and should provide relief to borrowers, as with all student loans, it is essential to carefully consider the details and how they apply to your unique situation.â
Ferastoaru explains what has and hasn’t changed in the PSLF program:
- Payments. All previous loan payments will count as qualifying PSLF payments, regardless of loan type, repayment plan, or whether payment was made in full or on time. Members will also receive credit for any period of active service during which their loans have been deferred.
- Consolidation of loans. You must consolidate any FFEL, Perkins, or certain other federal student loans into a direct loan by October 31, 2022, to take advantage of this rule change. After consolidating, you need to apply for loan forgiveness by submitting a PSLF form. To determine what types of loans you have, log into your account at StudentAid.gov and see your Help Summary.
- Automatic credit. If you have previously applied for the PSLF program, the Department of Education will review your payment history and credit you for any payments that did not previously count but are now counted under changes to the program.
- Employment in the public service. To be eligible, you must still have worked in the public service with an eligible employer when you made your payments. If you worked more than one qualifying part-time job at the same time, you will be considered full-time as long as you worked a combined weekly average of at least 30 hours.
- 120 payments. Although partial and late payments are now considered, you must make a total of 120 payments, or the equivalent of 10 years, to be eligible for loan cancellation.
For further help, borrowers should consider taking over America student loan advisory services.
About Take Charge America, Inc.
Founded in 1987, Take Charge America, Inc. is a non-profit agency providing financial education and counseling services including credit counseling, debt management, student loan counseling, housing counseling and bankruptcy advice. He has helped over 2 million consumers nationwide manage their personal finances and debt. To learn more, visit takechargeamerica.org or call (888) 822-9193.