The United States Department of Education has announced details of a much-anticipated overhaul of the broken Public Service Loan Forgiveness (PSLF) program.
In what is seen as a huge win for educators, other Public Service workers and unions who have been pushing for changes, the Department estimated that more than 22,000 borrowers would become immediately eligible to have their loans erased automatically.
Another 27,000 borrowers previously declared ineligible could see their debts disappear if they submitted employer information.
In all, the PSLF program is expected to ease the burden of some half million borrowers.
The PSLF program is infamous for denying student loan forgiveness to thousands of Public Servants, dismissing applications due to administrative errors and other technicalities.
Unions have filed lawsuits and fiercely advocated to force the Federal Government to fix the problems and fulfil the bipartisan promise of Public Service loan forgiveness.
President of the American Federation of Teachers, Randi Weingarten said changes to the plan were a game-changing victory for educators, healthcare professionals and public employees struggling with student debt.
“We breathe a collective sigh of relief as the Kafkaesque system that dashed the dreams of far too many finally starts to be dismantled,” Ms Weingarten said.
Since its inception, the Public Service Loan Forgiveness program, which is supposed to forgive the student debt of teachers and other Public Service workers after 10 years of service and 120 qualifying monthly payments, has rejected 98 per cent of applicants.
The changes include a broad expansion of the kind of payments that count toward PSLF.
Originally the program was limited to Federal direct loans through Income-Driven Repayment plans, now borrowers can also count payments they’ve made on other loans.
The Department is to launch an extensive outreach campaign to let borrowers know about the changes, including emailing borrowers who’d hit 120 PSLF-eligible payments but needed to verify their employment to receive loan forgiveness.
Washington, 11 October 2021
