[ad_1]
- The Ministry of Education announced major reforms to the Public Service Loan forgiveness program (PSLF).
- The PSLF rejected 98% of the candidates, and these changes will bring 550,000 of them closer to relief.
- One of the changes includes a waiver that allows any federal student loan payment to count towards the program.
- See more stories on the Insider business page.
The Public Service Loan Forgiveness Program (PSLF) is supposed to write off civil servants’ student debt after 120 qualifying monthly payments, but serious shortcomings in the program have led it to reject 98% of applicants.
The Education Ministry on Wednesday announced major reforms to the program to bring thousands of borrowers closer to the debt relief they deserve.
According to the ministry press release, it will implement a limited-term waiver until October 31, 2022, which will allow borrowers to account for payments from any federal loan program or repayment plan towards loan forgiveness through PSLF, including programs and plans that were not previously. eligible.
The department said this waiver alone would automatically bring 550,000 borrowers closer to student debt relief, including 22,000 borrowers who will be immediately eligible for relief without any action on their part, for a total of $ 1.74 billion. dollars in rebate. Another 27,000 borrowers could also receive a rebate of $ 2.82 billion if they certify additional employment.
“Borrowers who dedicate a decade of their life to public service should be able to count on the promise of forgiveness of public service loans. The system has failed to deliver on this promise to date, but that is about to change for many borrowers who have served their communities and their country, ”Education Secretary Miguel Cardona said in a statement. . “Teachers, nurses, first responders, the military and so many public service workers support us, especially amid the challenges of the pandemic. Today, the Biden administration shows that we support them too. “
Here are the other major changes to the PSLF that the Education Department will be implementing, according to a fact sheet:
- Facilitate the eligibility of payments to the program, ensuring that borrowers do not run out of credit due to late payment or wrong amount;
- Allow months spent in active service for service members to count towards payments, even if loans were deferred or withheld;
- Automatically give the military credit for the PSLF without having to submit documents themselves;
- Review all refused PSLF requests to identify and correct errors, and borrowers who believe there has been an error in processing their requests may receive another review next year;
- Improve the awareness of borrowers eligible for the PSLF;
- Simplify the application process, for example by allowing employers to sign certification forms for their employees;
- And make long-term improvements to the program through the rule-making process.
The Education Department plans to roll out these changes in the coming months, which would bring the total student debt cancellation under President Joe Biden so far to over $ 11.5 billion for over $ 580 billion. 000 borrowers.
Biden has campaigned to reform the PSLF, and actions announced on Wednesday show he is keeping that promise. And Insider reported earlier this month that if the program continues on its current track, it could see minor improvements, but will still only approve 20% of borrowers for a discount by 2026 – this overhaul will likely put the borrowers on a much better path.
Along with these reforms, the ministry is implementing changes not only to the PSLF, but to a range of loan cancellation programs, and negotiations began this week on what these reforms should look like. More than 45,000 borrowers had submitted comments to the Federal Register on how the PSLF should be improved.
[ad_2]
Source link