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On Wednesday, the U.S. Department of Education announced an overhaul of the Public Service Loan Forgiveness (PSLF) Program that it will implement over the next year to make the program live up to its promise.
This policy will result in 22,000 borrowers who have consolidated loans—including previously ineligible loans—being immediately eligible for $1.74 billion in forgiveness without the need for further action on their part.
Another 27,000 borrowers could potentially qualify for an additional $2.82 billion in forgiveness if they certify additional periods of employment.
All told, the Department estimates that over 550,000 borrowers who have previously consolidated will see an increase in qualifying payments, with the average borrower receiving another two years of progress toward forgiveness.
Many more will also see progress as borrowers consolidate into the Direct Loan program and apply for PSLF, and as the Department rolls out other changes in the weeks and months ahead.
“Borrowers who devote a decade of their lives to public service should be able to rely on the promise of Public Service Loan Forgiveness. The system has not delivered on that promise to date, but that is about to change for many borrowers who have served their communities and their country,” said U.S. Secretary of Education Miguel Cardona.
“Teachers, nurses, first responders, servicemembers, and so many public service workers have had our back, especially amid the challenges of the pandemic. Today, the Biden Administration is showing that we have their backs, too.”
The changes announced today include:
- A limited PSLF waiver that allows all payments by student borrowers to count toward PSLF, regardless of loan program or payment plan.
- Automatically providing credit toward PSLF for military service members and federal employees using federal data matches.
- Reviewing denied PSLF applications for errors and giving borrowers the ability to have their PSLF determinations reconsidered.
Including the borrowers eligible for immediate forgiveness under these actions, the Biden-Harris Administration has now approved more than $11.5 billion in loan cancellation for over 580,000 borrowers.
