Feds forgive billions in student loans for public service workers – USA TODAY

More than 175,000 people are approved to receive about $10 billion in student loan debt cancellation through a government program designed to encourage people to work in public service, the Education Department said. 
The figures, shared Tuesday, emerged as President Joe Biden is expected to announce as soon as Wednesday if the federal government will cancel $10,000 in debt for borrowers making less than $125,000 annually. Though the $10 billion figure is a fraction of what is expected to be erased, changes to the program for public service workers still mark some of the largest swaths of debt to be cancelled by the federal government. 
It’s also part of the $32 billion in student loans the Biden administration already forgave through existing debt relief programs. Most recently, the federal government wiped nearly $4 billion in federal loans for roughly 208,000 borrowers who attended ITT Technical Institute from January 2005 to September 2016.
“Today’s announcement that we’ve surpassed $10 billion in forgiveness for more than 175,000 public servants shows that the Biden-Harris administration’s efforts to cut red tape are turning the Public Service Loan Forgiveness program from a promise broken into a promise kept,” Education Secretary Miguel Cardona said.
The Public Service Loan Forgiveness program has long had a reputation for being difficult for borrowers to use. Broadly, those working for the government or nonprofits qualify. That may include teachers and firefighters, but also public defenders and doctors.
The program requires borrowers to work full-time in a qualifying public service job and pay down their federal student loans for 10 years. The federal government then would forgive whatever balance remains after a decade. 
It didn’t work that simply in practice.
Opinion: ‘Forgiving’ student loans isn’t motivated by kindness. It’s all about cold, hard politics.
The federal government for years rejected nearly all applicants because of the program’s rigid criteria. It required, for example, that borrowers carry direct loans, those owned directly by the government, though many borrowers were unaware they had the wrong type of loan until after making years worth of payments. Borrowers were also denied because they were in the wrong type of repayment plan or they had made late payments. 
In October, the Biden administration loosened many of the program’s rules, and borrowers now can get credit for most past payments so long as they can prove they were working in a qualifying job at the time. When the department first announced the waiver, it said it would erase the debt of 22,000 borrowers and expected another 27,000 might benefit from full cancellation.
The definition of public service is based on a person’s employer, not their profession, which can make tracking the number of people eligible for the program difficult. 
The window for applying while some rules are being waived closes October 31, but on Tuesday more than 100 lawmakers and dozens of trade groups signed a letter urging the administration to extend it through July 1, 2023. (The Education Department urged borrowers who think they might be eligible to apply before the waiver ends.) 
The effort was led by Sens. Robert Menendez, New Jersey; Patty Murray, Washington and the chair of the senate’s committee on education; Tim Kaine, Virginia; Kirsten Gillibrand, New York, along with Reps. John Sarbanes, Maryland; Joe Courtney, Connecticut; Jahana Hayes, Connecticut; and Kathy Manning, North Carolina. 
They mentioned figures from the Student Borrower Protection Center, a borrower advocacy group, which estimated that only about 15 percent of the 9 million people who might be eligible for the program had started the application process. 
“Since the deadline of October 31, 2022 to qualify for PSLF under the waiver program is rapidly approaching, we ask that the Department extend this deadline in order to ensure that all public servants with federal student loans are able to benefit from this historic waiver,” they wrote. 
The letter signers also requested that the Biden administration increase its outreach to borrowers who might qualify for the program.
The Education Department said it will host four “days of action” in the coming weeks meant to “encourage public servants across the nation to take advantage of temporary changes” to the program. And Biden will send a letter to federal employees Wednesday informing them of the changes to the program and how they can apply.

source

Leave a Reply

Your email address will not be published. Required fields are marked *