Public Service Loan Forgiveness Program Gets Flexible
The US Department of Education stated Tuesday that it plans to make several modifications to a long-struggling student loan forgiveness program for public officials.
For more than a decade, the Public Service Loan Forgiveness program was mismanaged, resulting in forgiveness for only a small percentage of qualifying debtors.
The Biden-Harris administration temporarily enacted several of Tuesday's changes, including raising the sorts of payments eligible for forgiveness, in a waiver that ends Oct. 31.
More than 200,000 debtors have been accepted for more than $14 billion in forgiveness since the waiver's launch.
The PSLF forgives government and nonprofit employees' remaining loan amounts after 120 qualifying monthly payments when working full-time for a qualified employer.
Key Changes For PSLF
The new rules allow borrowers to obtain credit toward PSLF for late payments as well as payments made in installments or a single lump sum.
Payment would have been ineligible under previous regulations if it was even a few cents late or more than 15 days late.
The new rules also expand the kinds of conditions in which a borrower may postpone or suspend payments.
These modifications will be applied to eligible borrowers' accounts in July 2023 as a one-time account adjustment, the Education Department stated.
Two Dates To Know
Borrowers with commercially held FFEL loans who merge into Direct Loans by May 1, 2023, can still benefit from these revisions and the one-time account adjustment.