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Student loan forgiveness: US Department of Education revises civil service loan forgiveness program

By Jeanette C. Bennet

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.

But the program has long been criticized for being difficult to navigate, with borrowers receiving little help from their loan officers, companies that handle billing and other services. Many borrowers said they found out they weren’t eligible for the rebate until they had made what they believed to be the equivalent of a decade of qualifying payments.

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

The waiver is part of an effort to improve the public service loan program that was fraught with problems in the years following its promulgation by then President George W. Bush in 2007. These problems include confusion over eligibility requirements and the right types of federal student loans and repayment plans, as well as instances of poor communication between the Department of Education and loan officers, and between officers and loan officers. borrowers.

“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.

Political pressure

The pressure to simplify the civil service loan forgiveness program has increased under President Joe Biden, who is taking steps to streamline debt relief – unlike his predecessor, who proposed ending the forgiveness of debt. civil service loans and blocked other debt cancellation benefits.
More than 200 organizations, including the country’s two largest teachers’ unions, are calling on the administration to create a simpler path to cancel the debt of anyone who has worked in the public sector for a decade or more.
Some members of the Democratic Party, including Senate Majority Leader Chuck Schumer of New York and Senator Elizabeth Warren of Massachusetts, have repeatedly called on the Biden administration to go further and write off student debt of up to to $ 50,000 for each borrower.
But Biden has so far resisted those calls from his party and has instead focused on modifying existing programs, like one that offers debt relief to people scammed by for-profit colleges and one that rolls back. loans from those who are permanently disabled. .
Biden also extended the pandemic-related pause on federal student loan payments until January 31. Borrower balances have effectively been frozen for over a year, no payments required on federal loans since March 2020. Relief is even more important for those seeking Public Service Loan Discount. They receive credit for the 10 years of required payments as if they had continued to make them during the pandemic, as long as they are still working full-time for eligible employers.

CNN’s Katie Lobosco contributed to this report.


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Jeanette C. Bennet
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