Eligibility for Civil Service Loan Forgiveness has changed temporarily.What this means for the borrower is

43 million borrowers take out federal student loans. Some of these borrowers have gone on to careers in civil service, including teachers, firefighters, social workers, and military service.

To encourage public service, Congress created the Public Service Loan Forgiveness (PSLF) program. The Department of Education (Education) has made changes to the PSLF to increase the number of eligible borrowers for forgiveness. This includes a temporary change in eligibility that expires on October 31st.

During this limited period, nonprofits, government employees (including federal, state, and local), and military personnel taking federal student loans are eligible for loan forgiveness, even if they are not under their original eligibility rules. may be.but they must take action To take advantage of these changes before time runs out.

august, education announced There are several other opportunities for borrowers. For some, this includes debt forgiveness of up to $20,000. However, his WatchBlog post today highlights her PSLF program, which is only available to employees of certain public service organizations..

what is the program?

Congress created the Public Service Loan Forgiveness Program in 2007 to encourage people to work in the public service. If a federal student loan borrower has paid off the loan for 10 years while working as a civil servant and meeting other requirements, Education will forgive the remaining balance of the loan.

What is the impact of the change in eligibility?

The PSLF program initially suffered from high rejection rates, but recently temporary changes in education have enabled many borrowers to successfully obtain loan forgiveness.

we first report After the first group of borrowers became eligible in 2017, we investigated PSLF exemptions. At the time, when borrowers first started applying for waivers, we found that the PSLF program’s rejection rate exceeded his 99%. Among the reasons for denial, the borrower was said to be ineligible because he was under the wrong loan program or had the wrong repayment plan.

In April 2021, report As of January 2020, only 287 civilian and military borrowers from the Department of Defense (DOD) had loan forgiveness through the program. Since then, however, the number of borrowers who have been forgiven has increased. As of June 2022, about 165,000 borrowers have taken his $10.5 billion loan forgiveness, according to Education. This increase is due in part to recent temporary changes to eligibility requirements.

This limited-term modification to the PSLF program allows borrowers to receive credit for past repayment terms and deferrals or deferrals for certain terms otherwise not covered by the program. However, as mentioned above, this change is temporary and will end on October 31st. action.

Are there updates for other programs?

Our work on student loans and the PSLF made recommendations to Education to improve oversight and communication around student loans.

For example, it recommended that the ministry make the PSLF more accessible to borrowers by providing more information about the types of employers eligible for the exemption and payments and simplifying the application process.

Education has responded to these recommendations by: offer Borrowers can provide detailed information about which employers and payments are eligible and simplification Application process by creating a single application form. In April 2021, we made recommendations to increase information sharing about the program with DoD personnel and borrowers.As a response to our company Recommendationthe Department of Defense, and educational institutions have taken preliminary steps to cooperate and share information about programs that may be relevant to civilian and military borrowers.

For more information on our work on PSLF, please visit: Key Issues Page Check out the report linked above on higher education access and affordability.

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