Public Service Loan Forgiveness Program Made More Flexible

President Joe Biden speaks about student debt relief plans as Secretary of Education Miguel Cardona listens at the Eisenhower Executive Office Building in Washington, DC, Oct. 17, 2022.

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Alex Wong/Getty Images


President Joe Biden speaks about student debt relief plans as Secretary of Education Miguel Cardona listens at the Eisenhower Executive Office Building in Washington, DC, Oct. 17, 2022.

Alex Wong/Getty Images

The U.S. Department of Education will make some significant changes to its long-troubled student loan forgiveness program for public employees, the department announced Tuesday.

This program, Public Service Loan Forgiveness or PSLF, mismanagement For more than a decade, only a small percentage of eligible borrowers were exempt.

“The idea was simple. “As one teacher told me, the system was full of trap doors. If you go through the wrong door, you’re out of luck.

The department is currently removing some of those trapdoors.

The Biden Harris administration had temporarily implemented many of the changes announced Tuesday. with limited exemptions More than 200,000 borrowers have been approved for over $14 billion in waivers since the waivers began.

Major Changes in PSLF

The basis of the PSLF is that government and non-profit employees will be forgiven of the remaining loan balance after making 120 qualifying monthly payments while working full-time for a qualifying employer. That’s what it means.

The Ministry of Education announced a permanent expansion of payment types. qualifying roundUnder the new regulations, borrowers can receive credit against the PSLF in arrears, in installments, or in one lump sum. Under previous rules, payments were ineligible if they were even a few cents short or more than 15 days late.

The ministry clarified that full-time employment is now defined as 30 hours a week and that there are more specific guidelines for part-time faculty and lecturers.

The new regulations also expand the types of circumstances under which borrowers may defer or suspend payments. Prior to the change, postponements such as cancer treatment and financial hardships could derail program borrowers.

Two dates you should know

Eligible borrowers of Federal Direct Loans and Federal Family Education Loans (FFELs) administered by the Department of Education will see these changes applied to their accounts in July 2023 as part of a one-time account adjustment, the department said. I’m here.

Borrowers who do not currently have eligible loans, including commercially held FFEL loans, will be eligible for these changes and one-off account adjustments once they are consolidated into Direct Loans by May 1, 2023. You can benefit.

Difference Between Waiver and Permanent Change

Borrowers who consider themselves eligible for the PSLF will continue to submit application before the limited waiver expires on October 31st. Tuesday’s announcement makes perpetuating many of the changes contained in the waiver, but when the waiver expires, it leaves a few key things behind.

Generally, borrowers must be actively employed by a nonprofit or government agency at the time of application to be eligible for the PSLF. A limited waiver provided an avenue for an eligible borrower who left the field during the pandemic to continue receiving her PSLF. When there are no more waivers, this path will be closed.To qualify for off-duty, borrowers must submit an application Previous October 31st.

The second way to run out in November is to teacher loan forgiveness, or TLF. Under the restricted waiver, the borrower can count hours towards both her TLF and PSLF, but after October 31st that will no longer be the case.

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