The deadline is fast approaching for borrowers seeking a limited public service loan forgiveness waiver. Student debt holders have until Oct. 31 to apply for a federal program that allows borrowers who work for a government agency or nonprofit to receive credit for past repayment periods that otherwise don't qualify under the program for loan forgiveness.
Anyone who took out a federal loan to pay for college, has made 120 qualifying payments and is on an income-drive repayment plan should qualify for public service loan forgiveness, but under a new waiver made available on Oct. 6, borrowers who don't meet all those requirements also may qualify for a limited time.
The public service loan forgiveness program is meant to help employees working in the public service sector, like nonprofit organizations, schools, hospitals and government agencies, eliminate student loan debt. To qualify, some applicants will have to consolidate their loans if they have more than one outstanding loan.
Experts note that "public service" is defined broadly and covers about a quarter of the workforce.
Borrowers can visit forgivemystudentdebt.org to learn more about the program parameters.
The public service program is different from the broad student debt cancellation plan announced by President Joe Biden in late August. Under that plan, borrowers can have $10,000 eliminated from their debt bill. Those who qualified for Pell grants given to low-income households are eligible for up to $20,000 in student debt relief. The application for that program
Historically, the public service loan forgiveness program has been fundamentally flawed, excluding many loan holders who should have qualified.
Mike Pierce is an attorney with the Student Borrower Protection Center who previously worked for the U.S. Department of Education.
"The Education Department mishandled the early years of this program to such an extraordinary degree that Congress has been trying to get them to fix it for the better part of a decade," Pierce said during a hosted by Democratic Rep. Suzanne Bonamici, whose congressional district includes Clatsop, Columbia and Washington counties, as well as portions of Portland. Bonamici serves on the Education and Labor Committee. Pierce was the guest panelist, tapped to provide expert knowledge on how to navigate the loan forgiveness application and process.
The former Education Department employee said many borrowers had their paperwork mishandled, or couldn't navigate the administrative hoops and burden of the loan forgiveness program. To complicate matters, Pierce said, the student loan industry "has routinely, right up until now, provided people with wrong information about how these rules work."
Pierce advises anyone who qualifies or thinks they may qualify to go online to studentaid.gov and start an application for PSLF if they haven't yet. Borrowers can search for their employer through a database and proceed with a loan consolidation process if needed, to get their application started.
Despite the program's past failures and hiccups, Pierce said, the road ahead will be better. Changes have been made to ensure a more efficient process, including a new loan servicing company at the U.S. Department of Education.
"This program is working because of the changes the Biden administration put in place. More than 200,000 public service workers across the country have had their debts canceled in just 11 months. That's compared to fewer than 10,000 people over the prior 14 years. So it is actually working. It's working at scale," Pierce noted.
Student loan debt repayment has been on pause since 2020 and will continue through the end of 2022.
Application coming for $10K, $20K relief
For those looking for relief under the recently announced general student loan forgiveness plan, an application was promised by the Department of Education in October. On Oct. 12, federal officials announced a "preview" of the application, indicating the process to apply through studentaid.gov would open soon.
While the revamped public service loan forgiveness program and the new general debt cancellation have given many college grads hope, Rep. Bonamici said lawmakers are working to prevent future borrowers from incurring massive debt for a degree.
"We're working on college affordability. A lot of what we're talking about today is a short-term solution, but we need long-term solutions as well, and we're working on that in the Education and Labor Committee," Bonamici said.
Addressing questions about what recent lawsuits against the Biden-Harris administration's student debt cancellation plan could mean for the program, the Oregon lawmaker said she's confident the program isn't going away.
"We're, of course, watching the litigation challenging the debt forgiveness program," Bonamici said. "I'm confident that the Biden administration has done the work to confirm that this is an appropriate executive order that is putting this program into place. At the same time, we're also working on legislation for the long term to make sure that college is affordable and accessible."