By Angela Morabito
Editors Note: The author of this piece worked at the Department of Education from 2019-2021 and communicated with the press about the PSLF program.
The Biden administration announced that it will forgive at least $1.7 billion is student loan debt for borrowers who previously failed to qualify for the Public Service Loan Forgiveness (PSLF) program. An additional $2.8 billion could be forgiven if certain borrowers can demonstrate that they meet the program’s requirement to work in a public service job for ten years.
The Department of Education will forgive these loans by temporarily waiving some of the program’s eligibility requirements, including the parameters around which type of loans and repayment plans qualify. Congress wrote the law on eligibility for PSLF. The Department administers the program, but until now has not overrode Congress to loosen the eligibility requirements.
When Congress created the Public Service Loan Forgiveness program in 2007, it instated strict requirements for borrowers to have their loans forgiven: A borrower had to work full-time for 10 years at a qualifying employer, make monthly payments for the entire time, be on a qualifying repayment plan, and have federal direct loans (other types of loans do not qualify). If the requirements were met, the remaining balance on their loans would be eliminated; in other words, paid for by federal taxpayers in exchange for the borrower’s ten years of public service.
These stringent requirements meant that very few people qualified. The most recent agency data shows that 97.9 percent of PSLF applications are denied.
Because of these PSLF waivers, payments that were made late, made through payment plans that did not qualify, or made on a type of loans that did not qualify will be able to count toward the 120 required payments.
In addition to these temporary measures, Sec. Miguel Cardona plans to permanently change the PSLF rules going forward through negotiated rulemaking.
According to a New York Times calculation, Cardona has previously nationalized $10 billion in student loans. The announced actions will bring the total to at least $11.7 billion.
Originally published by Campus Reform. Republished with permission.