On October 6, the US Education Department announced changes to the Public Service Loan Forgiveness program that will benefit more than 550,000 public service workers.
The PSLF program has been widely criticized as the most poorly communicated and confusing programs by the Education Department, due to the hard to meet requirements in order to qualify for forgiveness.
With this new announcement, will it actually make things life easier for our public service workers to get their loans forgiven, or will it just lead to more confusion.
What is PSLF?
The Public Service Loan Forgiveness program was made in 2007 as a way to encourage public service. The program forgives any remaining federal student loan balance after making 120 months of qualifying payments under a qualifying repayment plan while working full-time for a qualifying employer.
Then in 2017, the first batch of applicants were up to receive their long-awaited forgiveness, yet nobody really knows if anybody received forgiveness at all because nobody said anything that year.
However, the earliest proof that someone did receive forgiveness was in February of 2018. A deleted Reddit account posted a screenshot of their official forgiveness letter, with all of their outstanding balances forgiven.
Check that post here. I suggest reading the comment thread too, so you learn more about the poster’s loan information and PSLF background.
This basically just tells us that there is a gap in qualifying for PSLF before actually getting your loans forgiven.
Why Borrowers Have a Problem with PSLF
But the one thing that most borrowers seem to have a gripe with about PSLF is the misinformation or lack of information from servicers about their eligibility for forgiveness.
Some didn’t knew that they had to consolidate their loans to be on track, some experienced processing delays and servicer errors that made them miss out on qualifying payments, and some experienced problems with employer certifications.
When the pandemic hit, it made things worse because, among other things, people lost their jobs and fell behind on their payments.
Public service workers who’s hopes on debt relief through PSLF were disappointed when they got denied for PSLF because of the program’s errors and confusing requirements.
New Changes Announced!
On October 6th, the Education Department announced that it would make some changes to the program.
“We will offer a time-limited waiver so that student borrowers can count payments from all federal loan programs or repayment plans toward forgiveness. This includes loan types and payment plans that were not previously eligible. We will pursue opportunities to automate PSLF eligibility, give borrowers a way to get errors corrected, and make it easier for members of the military to get credit toward forgiveness while they serve. We will pair these changes with an expanded communications campaign to make sure affected borrowers learn about these opportunities and encourage them to apply.”
The Department estimates that this move will help over 550,000 borrowers who consolidated their loans to be counted towards their payment requirements.
Also, this will help 22,000 borrowers be eligible to get their loans discharged, totaling to $1.74 billion in forgiveness. And another 27,000 could potentially qualify for forgiveness should they certify their employment.
These are the changes that the Education Department has announced:
- A Limited PSLF Waiver to count all prior payments, regardless of loan program
- Simplify qualification for PSLF
- Eliminate barriers for military service members to get PSLF
- Automatically help service members and other federal employees access PSLF
- Review past denied PSLF applications and identify and correct them
- Improve outreach to PSLF-eligible borrowers
- Simplify PSLF application process
- Long-term improvements to PSLF through rulemaking
Detailed descriptions for the changes can be found on the Education Department’s article here.
If you’re looking for information regarding the PSLF waiver, it will run through until October 31, 2022. You’ll need to submit a consolidation application before that date, and use the PSLF Help Tool through StudentAid.gov/PSLF to get the process started.
Please visit StudentAid.gov/PSLFWaiver for more information and see what else you need to do for this waiver.