The Department of Education confirmed Wednesday that 100,000 borrowers are now eligible for $6.2 billion worth of student loan forgiveness through a program benefiting public service workers.
Under the Public Service Loan Forgiveness program (PSLF), public servants are able to have their student debt balances discharged after making 120 qualifying payments on their loans. This would effectively allow PSLF applicants to achieve student loan forgiveness after 10 years of repayment.
“The PSLF announcement made today means more of our dedicated teachers, nurses, first responders, servicemembers, and many other public service workers will get meaningful relief.”
The Biden administration overhauled the program last October through a limited PSLF waiver that made it easier to qualify for a loan discharge by giving borrowers credit for past periods of repayment. Prior to the changes, about 98% of PSLF applications were rejected.
“Our nation’s public service workers must be able to rely on the promise of Public Service Loan Forgiveness,” said Education Secretary Miguel Cardona. “The Biden-Harris administration is delivering on that promise by helping more and more eligible borrowers get their loan balances forgiven.”
Keep reading to learn more about PSLF to see if you qualify for this program. If you’re not eligible for student debt cancellation, consider your alternative options like income-driven repayment and student loan refinancing. You can compare student loan refinance rates on Credible for free without impacting your credit score.
THIS IS THE AVERAGE STUDENT LOAN DEBT IN EVERY STATE
Who is eligible for the PSLF program?
Public Service Loan Forgiveness makes it possible for select borrowers to qualify for a federal student debt discharge after making payments on their loans for a period of 10 years. The program is available to public service workers like nurses, teachers, military personnel, first responders and nonprofit employees. To be eligible for PSLF, borrowers must:
- Be employed full-time by a federal, state, local or tribal government or nonprofit organization
- Have Direct Loans or consolidate other federal loans into the Direct Loan program
- Repay your debt under an income-driven repayment plan (IDR)
- Make 120 payments while you’re fully employed by a qualifying employer
Last year, the Education Department changed the PSLF program rules “for a limited time as a result of the COVID-19 national emergency.”
Under the limited waiver, any prior payment made by a PSLF applicant would count as a qualifying payment regardless of the loan type, repayment plan or whether the payment was made on time and in full. In order to qualify, borrowers will need to move their federal student debt, like Federal Family Education Loan (FFEL) Program loans or Federal Perkins Loans, into a Direct Consolidation Loan by Oct. 31, 2022.
As a result of these changes, the department estimates that more than 550,000 borrowers are two years closer, on average, to achieving a student loan discharge. And on March 9, the department announced that it has now identified 100,000 borrowers who are eligible for forgiveness under PSLF.
You can see if you qualify for this program using the PSLF Help Tool. If you don’t meet the PSLF eligibility requirements, you may be considering other ways to manage your student loan debt. One strategy is to refinance to a private student loan at a lower interest rate.
Although student loan refinancing may help you repay your debt on more favorable terms, it would make you ineligible for certain government protections like IDR plans, deferment, COVID-19 administrative forbearance and federal student loan forgiveness programs like PSLF. You can learn more about student loan refinancing on Credible to…
Read More: 100,000 borrowers now qualify for student loan forgiveness under PSLF waiver: Education Department