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Through the civil service loan forgiveness program, the government forgoes the remaining federal student loan debt for eligible public sector workers after making monthly payments for 10 years.
In an announcement on Wednesday, the education ministry said it would “restore the promise” of the debt relief program through a series of actions that will be implemented “over the next few months,” according to the government. a note from the agency.
These actions include the offer of a time-limited waiver allowing “all prior payments” of student borrowers to be considered in the program, including the types of loans and payment plans that were not eligible. previously for a discount. This waiver will continue until October 31, 2022, the memo said.
“This limited PSLF waiver will apply to borrowers with direct loans, those who have already joined the direct loan program, and those with other types of federal student loans who apply for consolidation into the program.” direct loans while the waiver is in effect, “according to the agency’s memo.
The waiver is part of an effort to improve the public service loan program that has been fraught with problems in the years since its promulgation by then President George W. Bush in 2007. These problems include confusion over the eligibility requirements and correct types of federal student loans and repayment plans, as well as instances of miscommunication between the Department of Education and loan officers, and between officers and borrowers .
“Borrowers who devote a decade of their lives to public service should be able to rely on the pledge to forgive public service loans,” Education Secretary Miguel Cardona said in a statement on Wednesday. “The system has not delivered on its promise to date, but that is about to change for many borrowers who have served their communities and their country.”
Highlighting errors in the application review process as “of particular concern,” the ministry also said it would conduct both internal reviews of refused applications and external reviews of the processing involved in the program.
“These actions will help identify and resolve service errors or other issues that have prevented borrowers from getting the PSLF credit they deserve,” the agency said in a press release.
Wednesday’s announcement also includes a pledge to help military service members and federal employees access the resources of the public service loan program.
“Next year, the department will begin automatically granting federal employees credit for the PSLF by matching Department of Education data with information held by other federal agencies on service members and the workforce. federal work, ”the agency said.
For military service members, time spent on active service will be credited to the program, even if loans were deferred or non-voting. “Federal Student Aid will develop and implement a process to manage student loan deferral and forbearance periods for active duty members and will notify affected borrowers to let them know what they need to do to take advantage.” of this change, ”according to the note.
The Department of Education has also committed to launching an “extended awareness campaign” with borrowers, streamlining the application process, and making long-term improvements to the program through the rule-making process at the lender. ‘to come up.
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