US Education Secretary Miguel Cardona looks on as President Joe Biden announces student loan relief … [+]
A student loan forgiveness waiver for borrowers working in public service careers is expiring in a matter of weeks. Biden administration officials are stepping up outreach efforts, urging borrowers to apply as soon as possible.
Here’s what student loan borrowers should know.
Public Service Loan Forgiveness (PSLF) allows borrowers to get their federal student loans forgiven if they devote a substantial portion of their careers to public service work. Under the program’s original rules, borrowers were eligible for federal student loan forgiveness after 120 “qualifying payments,” which are payments made on Direct federal student loans under an income-driven repayment plan while working full-time for nonprofit or government organizations. PSLF can provide complete federal student loan forgiveness in as little as 10 years.
But the PSLF program was beset by administrative issues for much of its existence. Congress created tricky eligibility criteria that proved difficult for borrowers to navigate, while the Education Department and its contracted loan servicers historically did a poor job running the program. The result was a dismal approval rate and widespread borrower frustration.
As a result of these issues, the Biden administration established the Limited PSLF Waiver last year. Under the waiver, the Education Department will be able to retroactively count any repayment period on any kind of federal student loan (including FFEL-program loans, which were excluded from PSLF under the original program rules), as well as certain periods of deferment and forbearance, towards a borrower’s loan forgiveness term under PSLF. Over $10 billion in student loan forgiveness has already been approved under the waiver initiative, according to Education Department officials.
But the Limited PSLF Waiver is temporary, and it ends on October 31 — only a little over four weeks from now. And federal student loan borrowers have a rapidly closing window to apply.
To qualify, borrowers with FFEL-program loans would need to consolidate those loans via the federal Direct consolidation program prior to the October 31 deadline. And borrowers who haven’t certified their employment by completing and submitting PSLF Employment Certification forms would need to do so by then, as well.
Education Department officials are ramping up an outreach campaign, urging borrowers to apply for the Limited PSLF Waiver before it’s too late.
“Time is running out! The Public Service Loan Forgiveness waiver ends 10/31,” tweeted Education Secretary Miguel Cardona earlier this week while advertising a how-to-apply recording by Federal Student Aid staff.
“Over [170,000] borrowers have had their debt forgiven! Over $10 [billion] of debt has been wiped out!” Cardona tweeted last week. “Don’t sit on the sidelines, the October 31st deadline to apply for #PSLF under our new changes is closer than you think!”
Other top Education Department officials also tweeted and retweeted messages encouraging borrowers to apply for loan forgiveness by October 31.
Student loan borrower advocacy groups have been pushing the Biden administration to extend the October 31 deadline for the Limited PSLF Waiver, but so far, there are no indications that will happen.
Borrowers with existing Direct loans who have already certified all of their public service employment do not necessarily have to take any further steps to benefit from the Limited PSLF Waiver. The Education Department is continuing to adjust borrowers’ PSLF counts of qualifying payments, and will continue to do so even after October 31. In particular, the Department does not expect to start counting certain qualifying periods of forbearance and deferment until later this fall at the earliest, so borrowers should buckle up for extended processing periods.
Borrowers with FFEL-program loans would need to consolidate those loans into a Direct loan by October 31. The Education Department has clarified that, given that the consolidation process can take up to two months to complete, borrowers need only submit their Direct consolidation application online at StudentAid.gov by the October 31 deadline.
All borrowers who haven’t certified their employment via the formal PSLF Employment Certification forms should begin the process online via the PSLF Help Tool before the deadline. Borrower swill need to complete a separate certification form for each public service employer they have had. Officials “will maintain a record if you complete all the steps of the PSLF Help Tool on or before Oct. 31, 2022, but you must still print, sign, have your employer(s) sign, and submit the PSLF form to MOHELA, the PSLF servicer,” says the Education Department.
Borrowers should review detailed Limited PSLF Waiver guidance available on the Education Department’s website.
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