The overhaul of the United States’ troubled Public Service Loan Forgiveness Program appears to be working with more than 60,000 loan borrowers having their debt erased in the past three months.
This is well ahead of the projected figure of 22,000 for the same period.
The Department of Education released the updates to coincide with President Joe Biden’s first year in office.
The loan forgiveness program, which was rolled out in 2007, was designed to entice people to work as teachers, police officers, firefighters or in other public sector jobs.
After 10 years working in those jobs and making payments, the rest of the debt they had accumulated during their university studies would be erased.
However, when the first participants became eligible in 2017, almost no one’s debt was erased.
The program came with rigorous requirements that prevented most borrowers from qualifying for forgiveness.
Many had the wrong type of loan, or they weren’t enrolled in the correct income-based repayment program.
Borrowers often didn’t realise they had made an error until after applying for forgiveness after 10 years of repayments.
Many had no choice but to restart their payment clock.
The situation was compounded by the attitude of then President Donald Trump who had no enthusiasm for the program and sought to find ways of cancelling it altogether.
The criteria was revised and simplified under Mr Biden’s orders in October.
The Biden Administration estimates as many as 550,000 borrowers could now be eligible to benefit from the changes to the program.
As many as 43 million Federal borrowers are currently going through the 10-year process.
Washington, 23 January 2022
