Student loan forgiveness: US Department of Education revises civil service loan forgiveness program
Through the civil service loan forgiveness program, the government forgoes the remaining federal student loan debt for eligible public sector workers after making monthly payments for 10 years.
In an announcement Wednesday, the education ministry said it would “restore the promise” of the debt relief program through a series of actions that will be implemented “over the next few months,” according to a note from the agency.
These actions include the offer of a time-limited waiver allowing “all prior payments” of student borrowers to be considered in the program, including the types of loans and payment plans that were not eligible. previously for a discount. This waiver will continue until October 31, 2022, the memo said.
“This limited PSLF waiver will apply to borrowers with direct loans, those who have already joined the direct loan program, and those with other types of federal student loans who apply for consolidation into the program.” direct loans while the waiver is in effect, “according to the agency’s note.
Over a million borrowers have made at least one qualifying payment, but only a small percentage of registrants have received a rebate. About 5,500 people have had their debt written off, according to the latest government data.
Riddled with problems
“Borrowers who devote a decade of their life to public service should be able to rely on the pledge to forgive public service loans,” Education Secretary Miguel Cardona said in a statement on Wednesday. “The system has not delivered on its promise to date, but that is about to change for many borrowers who have served their communities and their country.”
Highlighting errors in the application review process as “of particular concern,” the ministry also said it would conduct both internal reviews of refused applications and external reviews of the processing involved in the program.
“These actions will help identify and resolve service errors or other issues that have prevented borrowers from getting the PSLF credit they deserve,” the agency said in a press release.
A commitment to the military
Wednesday’s announcement also includes a pledge to help military service members and federal employees access Public Service Loan Program resources.
“Next year, the department will begin automatically granting federal employees credit for the PSLF by matching Department of Education data with information held by other federal agencies on service members and the workforce. federal work, ”the agency said.
For military service members, time spent on active service will be credited to the program, even if loans were deferred or non-voting. “Federal Student Aid will develop and implement a process to manage student loan deferral and forbearance periods for active duty members and will notify affected borrowers to let them know what they need to do to profit.” of this change, ”according to the note.
The Department of Education has also committed to launching an “extended awareness campaign” with borrowers, streamlining the application process and making long-term improvements to the program through the rule-making process at the lender. ‘to come up.
CNN’s Katie Lobosco contributed to this report.