Biden administration overhauls student loan forgiveness program for public servants
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Washington — The Department of Education announced Wednesday it would be relaxing requirements for a student loan debt relief program for public-sector workers, a move the Biden administration estimates will benefit more than 550,000 teachers, members of the military, first responders and government employees.
Created in 2007, the Public Service Loan Forgiveness Program is intended to forgive the outstanding federal student loan debt for qualifying public workers who have made 10 years of monthly payments. But the Education Department acknowledged the program has fallen short of its pledge to public servants and hopes its overhaul will "restore the promise" of student loan forgiveness.
"Borrowers who devote a decade of their lives to public service should be able to rely on the promise of Public Service Loan Forgiveness. The system has not delivered on that promise to date, but that is about to change for many borrowers who have served their communities and their country," Education Secretary Miguel Cardona said in a statement.
Under the eased requirements, the Education Department will offer a limited waiver that allows student borrowers to count all previous payments toward forgiveness, regardless of loan type or repayment plan.
The Biden administration estimates the waiver, which will run through October 2022, will help more than 550,000 borrowers who consolidated their loans to move toward forgiveness.
For members of the military, the Education Department will also allow time spent on active duty to count toward loan forgiveness, even if a service member's loans were on deferment or forbearance instead of in active repayment.
The Biden administration also plans to match Department of Education data with information from other federal agencies to automatically help U.S. workers access loan forgiveness, and will review denied applications to identify and correct errors in loan-cancellation processing.
Citing the strain the COVID-19 pandemic has had on public-sector front-line workers, the Education Department said it's "critical" that student loan borrowers can have their loans erased.
"Frontline sectors like teaching and healthcare are already seeing burnout and employee shortages," the department said in a fact sheet detailing the changes. "Alleviating some of the financial strain associated with student debt can help borrowers in these sectors as they continue to navigate the fallout of this pandemic."
To participate in the program, a borrower must work full-time for a federal, state, local or tribal government, including the U.S. military, or tax-exempt non-for-profit group. Public schools, colleges and universities, child and family service agencies, and special governmental districts such as public transportation, water or housing authorities are considered eligible government employers, according to the Education Department.
While the program promises public servants their student debt will be erased after a decade of payments while working in public service, 99% of those who apply were told they're ineligible, according to a 2019 report from the Government Accountability Office (GAO). Of program applicants from the Defense Department, 94% were denied by the Education Department, the GAO found in an April report.
A "60 Minutes" report broadcast Sunday found that of the nearly 180,000 active-duty members with federal student loans, just 124 were approved for debt forgiveness.
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