Over 550,000 U.S. Borrowers Could Be Newly Eligible for Student Debt Relief


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The Biden administration is temporarily relaxing the rules for a student loan forgiveness program that has been criticized for its notoriously complex requirements—a change that could offer debt relief to thousands of teachers, social workers, military members and other public servants.

The Education Department said Wednesday it will drop some of the toughest requirements around Public Service Loan Forgiveness, a program that was launched in 2007 to steer more college graduates into public service but, since then, has helped just 5,500 borrowers get their loans erased.

Congress created the program as a reward for college students who go into public service. As long as they made 10 years of payments on their federal student loans, the program promised to erase the remainder.
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But more than 90% of applicants have been rejected. After making a decade of payments, many borrowers have found that they have the wrong type of federal loan or repayment plan to be eligible for the program. Thousands have ended up stuck with debt they thought would be cleared.

Under the temporary changes, those borrowers will now be eligible to get their loans erased.

Through October 2022, borrowers who have worked 10 years in a qualifying job will be eligible for loan relief no matter what kind of federal loan or repayment plan they have. Past loan payments that were previously ineligible will now count, moving some borrowers closer to the finish line.

The change will immediately make 22,000 borrowers eligible to get loans canceled, and another 27,000 could become eligible if they get previous payments certified, according to the department. In total, more than 550,000 borrowers will be moved closer to forgiveness, the agency said.

“Borrowers who devote a decade of their lives to public service should be able to rely on the promise of Public Service Loan Forgiveness,” Education Secretary Miguel Cardona said. “The system has not delivered on that promise…



Source : time


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