In what might signal the end to the long-running saga of the Public Service Loan Forgiveness (PSLF) program, the United States Department of Education has announced permanent changes that will make it easier for borrowers to get relief.
Student loan borrowers pursuing this type of forgiveness can now get credit for partial, late or lump sum payments, or for payments made under a different repayment plan, as well as credit for periods in deferment and forbearance.
Announcing the changes, Secretary of Education, Miguel Cardona said his team had worked to turn Public Service Loan Forgiveness from a promise broken into a promise kept.
Established in 2007, the PSLF program allows those who work for the Government or specific non-profits to get their student loan debt cancelled after 10 years, or 120 payments.
However, from the start the path to forgiveness has been plagued with problems, making it hard to get relief.
The new changes will “reduce the red tape that riddled the PSLF program,” Mr Cardona (pictured) said.
Higher education expert, Mark Kantrowitz said that before any changes to the PSLF were implemented, only three per cent of borrowers who applied received loan forgiveness.
He estimated that number had increased to more than 17 per cent by September.
Mr Cardona said temporary changes to the PSLF had already helped more than 236,000 teachers, nurses, veterans, Government employees and other Public Service workers secure more than $US14 billion ($A21.6 billion) in debt relief.
“We are now introducing 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,” Mr Cardona said.
“We are as committed as ever to upholding the promise of the PSLF and ensuring borrowers who devote their careers to teaching our children, strengthening our communities, and serving our nation get the relief they’ve earned.”
Washington, 27 October 2022
