Offices where government and non-profit employees are exempt from student loans are closed

Even before President Joe Biden Announced plans to allow up to $20,000 For most people with federal student loans, he had already made some less noticeable changes to the student loan system.

Proponents believe that for many borrowers, some of these changes will ultimately $10,000 to $20,000 full debt forgiveness — because it leads to a complete cancellation.

“I’ve worked in the student loan industry in a compliance or advocacy role since the world turned round,” he said. Association of Student Loan Advisors“And the past two years have seen more significant and positive changes than I’ve seen in my career, especially for the most vulnerable student loan borrowers.”

Some of the most significant changes are temporary changes made to the Public Service Loan Forgiveness Program. Created by Congress in 2007 Encourage people to enter low-paying public service jobs.

“These are our nurses, teachers, doctors, emergency services professionals, social workers,” said Jane Fox, an attorney at the New York Legal Aid Society. 2020.

Basically, anyone who works for the government or most nonprofits can apply to have their federal student loan balance forgiven after making regular, on-time payments for 10 years. (Full disclosure: This includes people who work for public radio, including this reporter.)

Erica Romero is also included. She is 48 years old, lives in Arlington, Virginia, and has worked with a higher education nonprofit since 2005. At that time, she began paying off her $100,000 student loan for her master’s degree in public policy.

“I don’t remember how much we paid, but I don’t think there was much of a dent,” she said.

When she learned about the PSLF a few years into her career, she knew there was a way out of debt.

However, there are many specific rules about what kind of loan you must have and what kind of repayment program you must participate in to be eligible. For a long time few people understood them, and Romero was not one of them.

“I went and applied for a civil service loan forgiveness after 10 years and was denied,” she said. .”

She wasn’t the only one. Almost everyone who applied for her PSLF in the first few years was denied.

“The program’s approval rate was never above 1% to 2%,” says Adam Minsky, an attorney who specializes in helping student loan borrowers.

“The requirements of the original PSLF program were not well communicated to borrowers. People were applying without realizing they had done it.”

Student loan companies were useless, he said. They usually didn’t even tell borrowers that the program existed and didn’t help them get it off the ground.

“Somebody called me and said, ‘Hey, what are my options? I can’t afford to pay myself. , under the rules, grace periods don’t count against anything, so borrowers have wasted a lot of time that could otherwise count toward loan forgiveness.”

But now all these payments can lead to forgiveness.

Last fall, the Biden administration announced it would be retroactive Temporary exemption changes many PSLF requirements.

“A waiver is like giving a borrower a one-time jailbreak free card,” Mayotte said.

Anyone working full-time for an eligible employer who applied by Monday to get credit for past payments on the wrong type of loan or on the wrong repayment plan, which would normally not count. It is valid even if you are retired or not working as a civil servant, which is not normally the case.

“It’s huge,” Mayotte said. “Many people walked out the door and got forgiveness right away. Before this waiver, I never thought I would.”

This includes Erica Romero, whose first PSLF application was rejected several years ago.

When first hearing about the waiver, she said: I’m thinking, “Do you really want to do this just to get rejected again?”

“Since I’ve seen more and more stories of people being approved,” she said. Give it a try and see what they say.

Romero applied again, and about five months later she received an email. Her balance was zero.

Shortly thereafter, she received a refund check in the mail for all the extra payments she had made on the loan for the required 10 years, for about $7,000.

“It was amazing,” she said. “It was a real relief to know she could pay off her loan before she retired.”

That’s something she thought would never happen after her application was initially rejected.

To date, more than 236,000 people have been forgiven of loans totaling $14 billion. According to the Ministry of EducationMore people have applied and are waiting for their applications to be processed.

According to Institute of Student Loan Advisors Betsy Mayotte, there are still many people who could benefit but have not yet applied.

to them she said. Submit your PSLF form as soon as possible

The limited PSLF exemption expires a few days after the end of October.

However, some changes to the program remain.Just this week, the administration announced that borrowers who missed their deadlines Final shot to adjust PSLF status next summer. And from now on, it will be easier for people to qualify for the program.

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