Student loan forgiveness 2022: 100,000 borrowers eligible so far under new civil service rules

WASHINGTON — The Department of Education said Wednesday it has so far identified 100,000 borrowers eligible for student debt forgiveness due to agency changes to the department’s loan forgiveness program. public in October.

Cancellations for these individuals are expected to total approximately $6.2 billion in federal student debt relief. Not all eligible borrowers have yet been notified of their debt relief. They are being informed as they occur and the Ministry of Education could not provide a date when they will all have been contacted.

The announcement marks the latest effort by the Biden administration to make it easier for some borrowers to qualify for loan forgiveness under existing programs. But the administration’s piecemeal approach still falls short of the president’s campaign pledge to support canceling $10,000 for each of the roughly 43 million people who currently hold federal student debt, CNN reported.

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The Public Service Loan Forgiveness Program promises to erase remaining federal student loan debt after an eligible public service worker has made 10 years of monthly payments. It was created about 15 years ago, but a very small percentage of people who applied had been granted pardons before 2021.

Many borrowers criticized the program as difficult to navigate and some said they only found out they weren’t eligible for the discount after making what they thought was a decade of qualifying payments. Only borrowers with specific types of federal loans and enrolled in certain repayment programs were eligible.

Last year, the Biden administration temporarily expanded eligibility through Oct. 31, 2022, so the program now includes borrowers who had loans that weren’t originally eligible.

“Today’s PSLF announcement means that more of our teachers, nurses, first responders, service members and many other dedicated public service workers will experience significant relief,” it said at the time. Education Secretary Miguel Cardona in a statement.

Here’s who got the eligibility

Because of the temporary waiver, it doesn’t matter what type of federal student loan a borrower has or what repayment plan they are enrolled in. All payments will be eligible for the Civil Service Loan Forgiveness Scheme if the borrower was working full-time. for an eligible employer.

Previously, eligibility also depended on having a direct loan and enrolling in an income-based repayment plan, which sets payments based on income and family size. Those with federal home education loans, which were provided by private lenders but backed by the government, were not eligible.

What borrowers can do now

Many borrowers do not have to do anything for the Ministry of Education to review and update their qualifying payment counts.

But those with older federal home education loans will need to consolidate them into direct loans if they haven’t already. Payments made before the consolidation will now count towards receiving the relief.

Those who already have direct loans but did not submit employment certification forms for previous repayment periods should also do so now.

Borrowers have until October 31, 2022 to make these changes in order to qualify for forgiveness under the temporary waiver.

Student loan repayments set to resume in May

Federal student loan borrowers have not had to make monthly payments since March 2020, thanks to a pandemic-related pause on payments and interest. After several extensions of the pause, the Biden administration announced late last year that payments would resume on May 1.

But inflation is worrying some borrowers about the possibility of resuming payments – and the Russian invasion of Ukraine could drive prices up further.

White House Chief of Staff Ron Klain said last week that the Biden administration was considering a further extension of the hiatus.

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“I think the president is going to look at what we should do on student debt before the break expires, or he will extend the break,” Klain said during an interview with “Pod Save America” published Thursday. .

Asked about Klain’s comments at Friday’s press conference, White House Press Secretary Jen Psaki said, “This is obviously something we will continue to assess and review at the press conference. May is approaching.”

Biden has campaigned to globally forgive $10,000 in student debt per borrower, but has so far resisted pressure to do so. Instead, the Biden administration has made changes to forgiveness programs that already exist — like civil service loan forgiveness and a relief program for borrowers defrauded by for-profit colleges — so that more people are eligible. More than $16 billion in student debt has been forgiven under Biden to date.

The video in the player above is from an earlier report.

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