Student loan forgiveness: This major program only has a few weeks left to apply

Teachers, government employees and people employed by non-profit organizations have just days left to apply for a one-time waiver that could help them erase or reduce their student debt.

The so-called “limited waiver of public service loan forgiveness” was designed by the Biden administration last year to address a major problem with a long-running program designed to provide college debt relief for public servants. Under the to renouncerpublic sector workers can apply for a credit for past repayments that did not qualify for loan relief.

The deadline to apply for the waiver is October 31, which means officials only have about three weeks left to get the relief.

of President Biden student loan relief effortwhich will erase up to $20,000 in student debt for qualified borrowers, has received significant attention, but administration efforts to help public servants deal with their college debt burdens have been less highlighted.

The Public Service Loan Forgiveness program was established in 2007 with a lofty goal: to cancel the student debt of Americans who work in public service – as teachers, government employees or in nonprofit organizations – during at least 10 years. But the program has become notorious for its byzantine regulations, as well as misleading advice from some loan service companies that has hampered the ability of many officials to get help.

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For example, a 2018 report of the Government Accountability Office, a government watchdog, found that while 1 million people applied for the program, only 55 people at the time actually received debt relief.

One reason for the dismal results: People who had consolidated their student loans were told their payments didn’t count for the program, leaving them out of luck.

What is the waiver for?

Waiver Reverses some of the restrictions about the types of loans and payments eligible for the program.

The Department of Education states that “any prior repayment period will count as an eligible payment, regardless of the loan program, repayment plan, or whether you made the payment in full or on time.”

For example, people who have consolidated their loans will now be able to count their payments in the program. The Biden administration estimates this will help 550,000 workers who were previously unskilled due to loan consolidation.

Previously, some loan repayments were disqualified if they were off by even a penny or paid a day or two late, according to the Department of Education. said Last year. The waiver means that these payments will now be considered for the program.

However, there is one major type of loan that does not qualify for the waiver: Parent PLUS loans. These are loans contracted by parents of students to pay for their children’s studies. Only loans contracted by students can benefit from the exemption.

How many people have qualified for the waiver so far?

Nearly 190,000 public servants had their student loans canceled thanks to the waiver, according to lawmakers citing government data.

Many other borrowers may qualify for the program but may not be aware of the waiver.

How do I know if I am eligible?

The Ministry of Education has a website where you can learn more about the program termswhich remain complicated.

An important restriction is that you will need to have worked for an eligible employer, such as a public school or government agency, to obtain waiver approval. Only payments made while you were working for a qualified employer will be considered.

For example, if you worked as a teacher at a public school for a year, but then switched to a for-profit school, only repayments made while you worked for the public school will count toward loan forgiveness. .

What happens after October 31?

Effective November 1, 2022, the Ministry of Education will return to its regular curriculum requirements for Cancellation of civil service loans and the Expanded Public Service Temporary Loan Program.

The latter was created in 2018 to help people who mistakenly signed up for the wrong repayment plan and therefore did not qualify for the Civil Service Loan Forgiveness Scheme.

Could the exemption be extended?

The Department of Education says the waiver will only be available until October 31, but a group of lawmakers are asking the administration for more time.

On Thursday, dozens of lawmakers asked US Secretary of Education Miguel Cardona to extend the waiver until July 1, 2023.

In an October 6 letter in Cardona, lawmakers including House Majority Leader Chuck Schumer, a New York Democrat; and Sen. Elizabeth Warren, a Democrat from Massachusetts, asked for more time, noting that the data “indicates that only a fraction of public servants eligible for the PSLF used the waiver.”

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