A student loan forgiveness waiver for borrowers working in the public service expires in a few weeks. Biden administration officials are stepping up outreach efforts, urging borrowers to apply as soon as possible.
Here’s what student borrowers need to know.
Opportunity to Forgive Student Loans Under Limited PSLF Waiver Ends October
Public Service Loan Forgiveness (PSLF) allows borrowers to have their federal student loans forgiven if they devote a substantial portion of their career to public service work. Under the program’s original rules, borrowers were eligible for federal student loan forgiveness after 120 “qualifying payments,” which are payments made on direct federal student loans under an income-based repayment plan. while working full-time for non-profit or government organizations. PSLF can provide full federal student loan forgiveness in as little as 10 years.
But the PSLF program has been beset by administrative problems for much of its existence. Congress has created tricky eligibility criteria that have proven difficult for borrowers to navigate, while the Department of Education and its contracted loan officers have historically done a poor job of administering the program. The result was a dismal approval rate and widespread borrower frustration.
Because of these issues, the Biden administration established the limited PSLF waiver last year. Under the waiver, the Department of Education will be able to retroactively count any repayment period on any type of federal student loan (including FFEL program loans, which were excluded from the PSLF under the original program rules) , as well as certain periods of deferment and forbearance, towards a borrower’s loan forgiveness term under the PSLF. More than $10 billion in student loan forgiveness has already been approved under the waiver initiative, according to Department of Education officials.
But the limited PSLF waiver is temporary and ends on October 31 – in just over four weeks. And federal student loan borrowers have a fast-closing window to apply.
To be eligible, borrowers with loans from the FFEL program should consolidate those loans through the Federal Direct Consolidation Program by the October 31 deadline. And borrowers who have not certified their employment by completing and submitting the PSLF employment certification forms will also need to do so by then.
Top Biden officials urge borrowers to apply for student loan forgiveness now
Ministry of Education officials are stepping up an awareness campaign, urging borrowers to apply for the limited PSLF waiver before it is too late.
” Hurry up ! Civil Service Loan Forgiveness Ends 10/31,” tweeted Education Secretary Miguel Cardona earlier this week as he announced a recording of how to apply by federal student aid staff.
“More [170,000] borrowers have seen their debt cancelled! Over $10 [billion] debt has been erased! Cardona tweeted last week. “Don’t stand on the sidelines, the October 31 deadline to apply #PSLF under our new changes is closer than you think!
Other senior Education Ministry officials also tweeted and retweeted messages encouraging borrowers to apply for loan forgiveness by October 31.
Advocacy groups for student loan borrowers have been pushing the Biden administration to extend the Oct. 31 deadline for the limited PSLF waiver, but so far there is no indication that will happen.
What Borrowers Need to Know About Applying for Student Loan Repayment Waiver
Borrowers with existing direct loans who have already certified everything of their employment in the public service do not necessarily have to take other steps to benefit from the limited PSLF derogation. The Ministry of Education continues to adjust the number of eligible PSLF payments from borrowers and will continue to do so even after October 31. In particular, the department does not expect to start counting certain forbearance and deferment periods until later this fall at the earliest, so borrowers should buckle up for extended processing periods.
Borrowers with loans from the FFEL program are expected to consolidate those loans into a direct loan by October 31. The Ministry of Education clarified that since the consolidation process can take up to two months, borrowers only need to submit their direct consolidation application online at StudentAid.gov before the October 31 deadline.
All borrowers who have not certified their employment through the formal PSLF Employment Certification Forms must begin the online process through the PSLF Help Tool before the deadline. The borrower will need to complete a separate certification form for each public service employer they have had. Officials “will keep a record if you complete all steps of the PSLF Support Tool by October 31, 2022, but you must still print, sign, have your employer(s) sign and submit the form. PSLF in MOHELA, the servicer of the PSLF”, indicates the direction of education.
Borrowers should review the detailed PSLF Limited Waiver guidelines available on the Ministry of Education website.
Further Reading on Student Loans
3 Big Student Loan Forgiveness Updates Borrowers Should Know
When can borrowers expect student loan forgiveness under Biden’s new plan?
Student loan borrowers should note these critical dates for loan cancellation and repayment
Biden’s student loan forgiveness could be taxable in some states