- The Education Department announced permanent fixes to the Public Service Loan Forgiveness program.
- They included one-time corrections to payment counts in PSLF, along with income-driven repayment plans.
- This comes just days before the PSLF waiver expires on October 31 and isn’t being extended.
President Joe Biden’s Education Department just announced fixes to make student-loan forgiveness easier for borrowers to obtain — permanently.
Nearly one year ago, the Education Department announced reforms to the Public Service Loan Forgiveness (PSLF) program, which is intended to forgive student debt for government and nonprofit workers after ten years of qualifying payments. Included in those reforms was a temporary waiver, expiring on October 31, that allowed any past payments, including those previously deemed ineligible, to count toward forgiveness progress.
While that waiver is not getting an extension, the department on Tuesday announced a series of permanent fixes to the program to help public servants benefit from this program going forward, along with borrowers enrolled in income-driven repayment (IDR) plans, which promise loan forgiveness after at least 20 years of payments. Specifically, the department will adjust a borrower’s account by giving them credit toward PSLF or IDR for:
- Any month the borrower was in repayment, regardless of whether the payments were late
- Any month the loans were in an eligible repayment, deferment, or forbearance status before consolidating
- Months a borrower spent at least 12 consecutive months in forbearance
- Months a borrower spent at least 36 cumulative months in forbearance
- And any month spent in deferment prior to 2013.
This adjustment will be automatic, but the department noted that in order to receive this one-time account adjustment, borrowers with ineligible loans — any loan that is not a direct federal loan or a FFEL loan managed by the department — need to consolidate them no later than May 1, 2023. As part of the rulemaking process, this will not go into effect until July 2023.
“Today, we’re encouraging public service workers to take advantage of the program’s temporary changes before the deadline on October 31,” Education Secretary Miguel Cardona said in a statement. “At the same time, we’re taking bold steps that will automatically move more hardworking public service workers closer to forgiveness and making permanent changes to reduce the red tape that riddled the PSLF program.”
Although the PSLF waiver is soon expiring, the account adjustment will give borrowers one more chance to get their payment counts corrected. Other PSLF improvements through regulations, to begin July 2023, include allowing borrowers to count late payments toward forgiveness progress, allowing deferment and forbearance periods to count, and…
Read More: Biden Announces Steps to Expand Student-Loan Forgiveness Programs