On Wednesday, the US Department of Education officially released details on the forgiveness overhaul of the troubled Public Service Loan Forgiveness (PSLF) program. This is great news for so many borrowers who work in the public sector.
The PSLF program forgives remaining federal student loan debt for qualifying public-sector workers after they have made monthly payments for 10 years. Unfortunately, most qualified borrowers have been unsuccessful receiving the forgiveness. The program has faced lawsuits from many borrowers who are qualified for forgiveness and have been denied. Other obstacles to forgiveness include borrowers receiving little assistance from loan servicers on the forgiveness process and the lack of the loan servicers understanding the guidelines.
These changes could potentially affect 550,000 borrowers working in government and nonprofit sectors; this includes approximately 22,000 borrowers who will automatically be eligible for student loan forgiveness without needing to take additional steps. This overhaul also includes a commitment to help military service members and federal employees access the forgiveness resources.
Could there be more help from the government for student loan debts? Some members of Congress been vocal in calling for President Biden to cancel student debt of up to $50,000 for every borrower. So far, Biden has resisted the demands and is focused on making changes to existing programs. We shall see…..