The American Federation of Teachers applauded reforms to the Federal Public Service Loan Forgiveness program announced Oct. 6.
The U.S. Education Department stated that it will “restore the promise of the PSLF” over the coming months, most notably by establishing a waiver allowing “all previous payments” to count towards student loan forgiveness—including payment plans and loan types that were previously excluded.
Will Aid 550,000
Borrowers with Direct Loans, Federal Family Education Loans and Perkins Loans are eligible and must apply for the waiver by Oct. 31, 2022. The department estimated that the changes would bring 550,000 borrowers closer to loan forgiveness, while 22,000 will see their student loan debt automatically eliminated.
“We will offer a time-limited waiver so that student borrowers can count payments from all Federal loan programs or repayment plans toward forgiveness,” the department said in a memo. “This includes loan types and payment plans that were not previously eligible. We will pursue opportunities to automate PSLF eligibility, give borrowers a way to get errors corrected, and make it easier for members of the military to get credit toward forgiveness while they serve.”
The Public Service Loan Forgiveness program was enacted by Congress in 2007 in order to encourage people to enter public service, with borrowers eligible after 10 years of service in Federal, state or local jobs and 120 payments.
But the program has come under intense scrutiny for being difficult to navigate: a 2019 Government Accountability Office report found that out of 54,000 applications processed by the Department of Education, just 661 were approved.
Union Blamed DeVos
The AFT filed a lawsuit against the U.S. Department of Education in 2019, claiming that then-Education Secretary Betsy DeVos had “grossly” mismanaged the program.
AFT President Randi Weingarten praised the changes.
“The AFT repeatedly highlighted the absurd administrative hoops and glitches that saw people get denied if their servicer entered the wrong number on a form or misspelled the name of their employer or counted their payments incorrectly,” she said.
“It’s clear that former Education Secretary Betsy DeVos made no attempt to address these issues—that’s why we sued her. And so, we welcome Education Secretary Miguel Cardona’s decision to deliver assistance to those who, through no fault of their own, made qualifying payments but were overruled by clerical oversights, inaccurate information or a deliberate lack of transparency.
She noted that it was critical to bring relief to public workers at this time because many served on the front lines during the height of the coronavirus pandemic.
“These wounds will take time to heal. But the Biden Administration’s decision to act is a giant step in the direction of both basic fairness and legislative intent,” Ms. Weingarten said.
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