May 10, 2023 - Politics & Policy

What to know about student loan forgiveness for public service workers

Illustration of a large pile of money with a graduation cap on top.

Illustration: Aïda Amer/Axios

The Department of Education announced this week that it has approved $42 billion in student loan debt through the Public Service Loan Forgiveness (PSLF) program.

The big picture: More than 615,000 borrowers have had their student debt wiped clean since October 2021, as tens of millions of others await a decision from the Supreme Court on President Biden's forgiveness plan.

Details: In October 2021, the Biden administration made temporary changes to PSLF to make it easier for borrowers to reach forgiveness.

  • Of the nearly 616,000 borrowers whose loans have been approved for forgiveness through the program, nearly 610,000 have already had their loans discharged, "and the rest will soon follow," the department said.
  • More than two million others "have an approved PSLF form and are on the path to forgiveness."
  • At the end of the Trump administration, only about 7,000 borrowers had been approved for the PSLF program, per the department.

What we're watching: Effective July 1, new regulations will go into place to help borrowers earn progress toward the program and to simplify criteria for certifying qualifying employment.

Who is eligible?

  • The program is for public employees, such as teachers, firefighters, members of law enforcement, and those who work for non-profit organizations.
  • It forgives the remaining federal student loan balance for those who have worked in public service for 10 years and have made 120 qualifying monthly payments.
  • All federal student loans through the William D. Ford Federal Direct Loan program are eligible for forgiveness.
  • Those with Federal Family Education Loan or a Federal Perkins Loan have to consolidate them into direct loans to qualify. But payments previously made on those loans won't count as qualifying payments toward PSLF.

How to apply

  • In a major update, borrowers can now sign and submit their PSLF form digitally and track its status online.
  • The form can also be printed and mailed.

Temporary changes to program rules

  • For a limited time, a limited PSLF waiver went into place to let borrowers get credit for past periods of repayment that would otherwise not qualify. The application for that ended in October.
  • But the Department of Education announced that borrowers who work in public service will have another opportunity to have their payment count increased under a one-time account adjustment through a consolidation application due by the end of 2023.
  • The changes mean that borrowers with federally managed loans may still see an increase in their payment counts toward income-driven repayment and PSLF forgiveness.
  • In addition, the Department announced proposed regulations earlier this year that would allow those with incomes under $30,500, or under $62,400 in a family of four, to qualify for $0 monthly payments.
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