Ed Dept. Announces Student Loan Forgiveness Has Surpassed $10B
WASHINGTON — With the White House reportedly poised to announce plans to cancel a significant amount of student debt on Wednesday, the Education Department revealed it has approved more than $1 billion in student debt relief through its public service loan forgiveness program in the last 10 months.
The announcement from the Education Department came as millions across the nation await word on whether student loan payments that have been deferred since the start of the coronavirus pandemic will resume next month.
Officials speaking on deep background said earlier today that President Joe Biden could roll out a program Wednesday – his first day back at the White House after his summer vacation — that would include roughly $10,000 in loan forgiveness for borrowers who make less than $125,000 a year.
The White House is also expected to announce that the current moratorium on student loan payments will be extended through the end of the year.
If it comes to pass, the announcement would be a week ahead of the self-imposed Aug. 31 deadline the president set for himself for the student loan decision.
In the meantime, the Education Department is encouraging borrowers who qualify to apply to the Public Service Loan Forgiveness program before its Oct. 31 waiver deadline.
In a written statement, Education Secretary Miguel Cardona said on Tuesday that before changes implemented in October 2021, Public Service Loan Forgiveness was “nothing more than an empty promise” that only 7,000 borrowers ever managed to qualify for.
The changes made to the program last year made it easier for a wider population of public servants with federal student loans to qualify to have their debts canceled.
“Today’s announcement that we’ve surpassed $10 billion in forgiveness for more than 175,000 public servants shows that the Biden-Harris administration’s efforts to cut red tape are turning the Public Service Loan Forgiveness program from a promise broken into a promise kept,” Cardona said.
“We’re committed to helping borrowers who choose to pursue careers in education, public health, social work, law enforcement and other critical fields receive the benefits to which they’re entitled for leading lives of service,” he added.
Temporary changes to the Public Service Loan Forgiveness program are also allowing student borrowers to get credit for payments made on loans from the Federal Family Education Loan Program, the Perkins Loan Program and other federal student loans.
These borrowers must apply to consolidate their loans into a Direct Consolidation Loan before the deadline of Oct. 31 to qualify for the program under the temporary changes.
Additionally, under the temporary changes, past periods of repayment count whether or not borrowers were on a qualifying repayment plan or whether or not borrowers made payments.
Most borrowers who work or worked for a nonprofit or federal, state, tribal or local government since 2007 and who were repaying their loans are eligible. Borrowers can also combine multiple sources of part-time employment to qualify and months in service do not have to be consecutive.
The Education Department on Tuesday encouraged borrowers to visit StudentAid.gov/pslfwaiver to learn more about the program before the Oct. 31 deadline.