An overhaul of the broken federal Public Service Loan Forgiveness Program (PSLF) announced on Wednesday is meant to restore the promise made to educators and other public service employees who have suffered under the program’s 98% rejection rate.
Changes include a limited one-year waiver that allows all payments by student borrowers to count toward PSLF, regardless of loan program or payment plan, a move to address complaints by NEA and other groups that the program has been overly complicated with labyrinthine rules.
The program is meant to forgive remaining student debt for educators and others who complete 10 years of public service and 10 years of payments on student loans, but many who believed they were making qualifying payments for years discovered their type of loan did not qualify.
“Borrowers who devote a decade of their lives to public service should be able to rely on the promise of Public Service Loan Forgiveness,” U.S. Education Secretary Miguel Cardona said in a press release Wednesday. “The system has not delivered on that promise to date, but that is about to change for many borrowers who have served their communities and their country.”
NEA is hosting a Town Hall with Secretary Cardona and others tonight at 6:15 to discuss the changes. On Thursday at 7 p.m., NEA will host an expert panel to answer your questions. RSVP for either or both of these events here.
The actions by the U.S. Education Department come on the heels of a first-of-its-kind report by NEA, “Student Loan Debt Among Educators: A National Crisis,” along with work by a coalition of public sector labor unions calling on the Biden administration to address problems in the program.
Under the limited-time waiver, borrowers who currently have FFEL, Perkins, or other non-Direct Loans, will get the benefit of this limited waiver if they apply to consolidate into the Direct Loan program and submit a PSLF form by October 31, 2022.
The Department estimates that over 550,000 borrowers who have previously consolidated will see an increase in qualifying payments with the average borrower receiving another two years of progress toward forgiveness.
“Teachers, nurses, first responders, servicemembers, and so many public service workers have had our back especially amid the challenges of the pandemic,” Cardona said. “Today, the Biden Administration is showing that we have their backs, too.”
In addition to the waiver, borrowers who have had PSLF applications rejected for errors can have determinations reconsidered. “These actions will help identify and address servicing errors or other issues that have prevented borrowers from getting the PSLF credit they deserve,” the department said.