Department of Education revises student loan exemption program for public servants

Watch the RCCS originals documentary “The Student Debt Dilemma” in the video player above.

Washington – The Education Department said on Wednesday it would relax the requirements for a student loan debt relief program for public sector workers, a move, the Biden administration estimates, will benefit more than 550,000 teachers, military personnel, first responders and government employees.

Established in 2007, the Public Service Loan Forgiveness Program aims to forgive past due federal student loan debt for eligible public workers who have made 10 years of monthly payments. But the education ministry has acknowledged that the program broke its promises to officials and hopes its overhaul “will restore the promise” to cancel student loans.

“Borrowers who devote 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 not kept that 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. .

As part of the relaxed requirements, the Department of Education will offer a limited waiver that will allow student borrowers to count all past payments for forgiveness, regardless of loan type or repayment plan.

The Biden administration estimates that the waiver, which will run until October 2022, will help more than 550,000 borrowers who have consolidated their loans move towards forgiveness.

For members of the military, the Department of Education will also allow time spent on active duty to count toward loan cancellation, even if a service member’s loans were deferred or forborne instead of ‘an active reimbursement.

The Biden administration also plans to match Department of Education data with information from other federal agencies to automatically help U.S. workers access loan cancellation, and will review denied applications to identify and correct any errors in processing loan cancellations.

Citing the pressure the COVID-19 pandemic has placed on frontline public sector workers, the Education Department said it was “essential” for student loan borrowers to be able to have their loans written off.

“Frontline sectors like education and healthcare are already experiencing burnout and employee shortages,” the department said in a backgrounder detailing the changes. “Alleviating some of the financial pressure associated with student debt can help borrowers in these sectors as they continue to weather the fallout from this pandemic. “

To participate in the program, a borrower must be working full-time for a federal, state, local, or tribal government, including the U.S. military, or a tax-exempt nonprofit group. Public schools, colleges and universities, child and family service agencies, and special government districts such as public transportation, water or housing authorities are considered eligible government employers, according to the Ministry of Education.

While the program promises civil servants their student debt will be wiped out after a decade of payments while working in the civil service, 99% of those who apply were told they were ineligible, according to a report of 2019 from the Government Accountability Office (GAO). Of those applying for the Defense Department’s program, 94 percent were turned down by the Education Department, GAO found in an April report.

A “60 minutes” report Airing Sunday revealed that of the nearly 180,000 active-duty members on federal student loans, only 124 had been approved for debt relief.