The Independent View: U.S. Department Of Education Student Loans Forgiveness Update

Though it may Not have fulfilled All of the Promises made on the Campaign Trail, President Biden's Administration has made some Progress on Student Loans. Last week, the Department of Education announced that it has Forgiven Loans for more than 70,000 Borrowers, to the tune of nearly $5 billion, since Revamping its Public Service Loan Forgiveness (PSLF) program in October 2021.

The PSLF program was First launched in 2007 with the Goal of helping Public Servants Pay-Off their Loans faster, yet almost 99% of Borrowers who have applied since 2008 have been Denied, many of them during the Trump Administration. Until now, just over "16,000 borrowers have ever received forgiveness under PSLF prior to this action," the Department said.

To Qualify for PSLF you must be Employed Full-time by a U.S. Federal, State, Local, or Tribal Government Agency, this includes the Military, or a Non-Profit Organization. You must have Direct Poans or other types of Federally-backed Loans that have already been Consolidated into Direct Loans, and you must make 120 Qualifying Payments, 10 years worth of Payments. Examples of Borrowers who Qualify for PSLF are Workers like Teachers, Nurses, and Firefighters, who serve their Local Communities.

The Department of Education is making it Easier for Borrowers to Enroll and receive Program Benefits. This includes making it Simpler to Identify and Address potential Errors made by their Loan Servicers, and Expanding the Types of Loans that will now be Eligible for Forgiveness. Another focus will be on enhancing Benefits for those in the Military, including converting time spent on Active Duty into a Loan Repayment.

Another Key Change is the introduction of a Limited Waiver, a New Tool that gives Borrowers a full Year to Apply for the PSLF Program under its New Terms and greatly Expands Eligibility. Prior to the announcement, there were Limited Options to Appeal a PSLF Application being Denied, and only 5% of People who applied for the PSLF program ever received Debt Forgiveness.

The Waiver also allows Borrowers to Consolidate Non-Direct Federal Loans that were Not previously Eligible for the program. For example, some Borrowers who took out Federal Family Education Loans (FFEL) were previously told they would be Ineligible for the PSLF. Now they can Apply for Forgiveness using the Limited Waiver. That means some Borrowers can now receive Credit for Payments and Periods of Employment, such as Active Military Duty, that they wouldn't have been able to before.

The PSLF expanded Eligibility for Borrowers, in the sense that More types of Loans and Payment Plans qualify for Forgiveness than ever before, but the Borrowers who can Apply are still Limited to Public Sector Workers. So more than 550,000 Borrowers who already Qualify for PSLF may now Qualify for additional Forgiveness. There are a few Specific ways to meet the Requirements and check if you're Eligible.

The easiest way to figure out if you Qualify is to Apply for the Limited Waiver. Filling out the Waiver will help you do things like Consolidate Different types of Loans or Certify previous Periods of Employment for Credit.

And even if you Suspended your Monthly Student Loan Payments during the Pandemic, you still Qualify for additional PSLF Relief. In fact, each paused Payment still Counts as a Qualifying Payment toward your Goal. So, if your Payments were paused for 22 months, that counts as 22 On-Time Payments.

The Department of Education has a Dedicated Tool to help Guide your Application for the Limited Waiver. The Deadline to Apply for the Waiver is Oct. 31, 2022, but the Sooner you Apply, the better. Some Borrowers may Not have to take any Action to have their Loans Canceled, but it's a good idea to Proactively confirm your Specific Details.

In the past, if you had been making Payments but your Loan Servicer had Incomplete or Inaccurate Records, you had almost No Recourse to counter their Claims. Now, with the Limited Waiver, you can apply for Forgiveness, and have your Payments counted toward your Debt and Forgiveness.

Previously, only Direct Loans with a Standard or Income-Driven Repayment Plan qualified for PSLF. However, for a Limited time, you may be able to receive Credit for Past Payments on Federal Loans that did Not previously Qualify for PSLF, regardless of your Repayment Plan. Borrowers with FFEL, Perkins, and other Federal Loans may need to Consolidate their Loans through the Direct Consolidation program before Oct. 31, 2022.

The Department of Education said in its Statement, that it will continue to Roll-Out and Update its Policies, in the coming months, as it attempts to get the PSLF program Back-on-Track.