Today, the U.S. Department of Education (Department) announced a one-time administration move closer to forgiveness for most Department of Education-administered loans, including credits to the Public Service Loan Forgiveness (PSLF) program for borrowers with eligible employment. announced the measures. This action coincides with the implementation of permanent amendments to his PSLF by the July 2023 regulations.
These measures will allow those who have already applied for the PSLF under a temporary change (known as a “restricted PSLF waiver”) to receive the PSLF by the end date of October 31, 2022. Many of the same benefits are provided to borrowers. Borrowers taking out direct loans or Department-administered Federal Family Education Loans (FFELs) must pay all amounts spent on repayment regardless of whether they have made partial or late payments, including pre-consolidation payments. You will receive credit towards the income-based repayment (IDR) exemption for the following months. Or have a repayment plan. Borrowers also receive grace for a specified period and credit during the grace period.
The Department of State strongly encourages borrowers to take the necessary steps to apply for waivers by October 31, 2022.
The U.S. Secretary of Education said, “Temporary changes to the Biden Harris team’s public service loan forgiveness will save more than 236,000 teachers, nurses, veterans, civil servants, and other public service workers more than $14 billion. We are very proud to have helped secure debt relief.” Miguel Cardona. “Today, we are encouraging civil servants to take advantage of temporary changes to our program before the deadline of October 31st. A permanent change to reduce the bureaucracy that plagued the PSLF program.As always, the Biden-Harris team will keep the promise of the PSLF, educate our children, and strengthen our communities. , is committed to ensuring that borrowers who dedicate their careers to the service of their country receive the relief obtained.”
Ensure that the borrower receives credit for the duration of the repayment period
In April 2022, Department announcement One-time improvement to address historical inaccuracies in the number of payments eligible for exemption under the IDR and the practice by loan servicers of withholding borrowers in violation of Department rules. As a result of these past failures, borrowers who have repaid for more than 20 or 25 years cannot receive forgiveness under his IDR, and borrowers who have repaid for more than 10 years while working in the public service You may not receive his PSLF. To address these inaccuracies, the Bureau reconciles the borrower’s account by granting credit to her IDR and her PSLF.
- Months in which the borrower was in repayment status, regardless of whether payments were partial or late, loan type, or repayment plan.
- The months in which the loan was in eligible repayment, deferral, or moratorium status prior to consolidation.
- The number of months the borrower spent at least 12 consecutive months in the grace period.
- The number of months in which the borrower spent at least 36 cumulative grace periods.When
- All months spent in deferrals prior to 2013 (excluding deferrals at school).
From November 2022, borrowers with 20-year (240 monthly payments) or 25-year (300 monthly payments) payments due to these changes will begin receiving loan forgiveness. Borrowers who have applied for the PSLF before October 31, 2022 and have reached 120 payments due to deferment and grace changes will also receive loan forgiveness. The department will continue to enforce waivers for borrowers who hit the forgiveness threshold in the months after November 2022.
In July 2023, the department will automatically apply the same payment counting treatment to all direct and department-managed FFEL loans for borrowers who have not otherwise reached the required number of months for forgiveness.
Permanent improvements to PSLF regulations
The department also announced lasting improvements to the PSLF program. This will be codified in the final rule. These improvements, which incorporate many elements of PSLF exemption, include:
- If the borrower also proves qualifying employment, the borrower can obtain late, partial, and lump sum credits.
- If the borrower also demonstrates qualifying employment, grant credit for specific months of deferment or leniency, such as those related to military service or deferrals for financial hardship or cancer treatment.
A more complete list of improvements can be found at fact sheetThe regulation will be published soon and will come into force on 1 July 2023.
Steps to get a limited PSLF waiver by October 31st
Program changes are fact sheet It offers significant benefits to borrowers with direct or department-managed FFEL loans, as well as direct loan borrowers seeking PSLF now and in the future. However, borrowers interested in the full benefits of the restricted PSLF exemption should: Act Until October 31st.
Building on an Unparalleled Debt Relief Track Record
Today’s announcement is part of the Biden-Harris administration’s broader efforts to ensure that students and borrowers enjoy their entitlements. These efforts include enacting lasting policies to make colleges more affordable, and holding schools accountable to students who are in debt and lack the skills and preparation to find good jobs. Incurring debt includes preventing future debt crises.
On August 24, President Biden announced plans to provide debt relief of up to $20,000 to 40 million eligible borrowers. About 22 million people have already provided the State Department with the information it needs to consider this relief. Additionally, over $38 billion in student loan relief was approved for 1.75 million borrowers. Also this:
- Over $14 billion for 1 million borrowers. The financial institution took advantage of them through defense of borrowers and immunity related to school closures.
- Over $14 billion to over 236,000 borrowers through the PSLF program.When
- In total, more than $9 billion in permanent disability allowances for borrowers and above.
View fact sheet with detailed information here.