The Biden administration announced Friday that it has approved more than $8 billion in student loan forgiveness for 145,000 borrowers under a temporary extension of the Public Service Loan Forgiveness Program (PSLF). But the initiative should end in a few months. And advocates are asking Biden to extend it.
Here are the details.
Biden administration approves billions in student loan forgiveness under expanded PSLF program
In October, the Biden administration announced a broad (but temporary) expansion of the Public Service Loan Forgiveness Program (PSLF). Borrowers who commit to working for at least 10 years for certain nonprofit or government organizations can obtain forgiveness of their federal student loans through the PSLF. But historically, the PSLF program has been plagued by low approval rates, complicated eligibility rules, and poor oversight.
The expansion — which the Biden administration has dubbed the PSLF Limited Waiver Program — temporarily loosens key PSLF eligibility rules, expanding the program. For a limited time, past loan periods that would otherwise have been disallowed (such as periods where payments were made under an ineligible repayment plan or not at all, or payments were made on types ineligible federal student loans) may count toward the time required for borrowers to obtain forgiveness of their student loan under the program.
Some borrowers may need to take certain steps, such as consolidating their loans through the Direct Consolidation Program and submitting forms certifying their government employment, to obtain credit.
The Biden administration’s latest $8.1 billion student loan forgiveness figure under the PSLF’s limited waiver is about $1 billion higher than its most recent figures released earlier in the spring. , indicating that the Ministry of Education continues to approve loan forgiveness for thousands of outstanding borrowers. , base of a bearing. The ministry pointed out through a spokesperson that the $8.1 billion figure includes borrowers who have already received relief, as well as borrowers who will receive it soon.
Student loan relief under PSLF limited relief ends October 2022
But the Limited PSLF Waiver program is scheduled to end on October 31, 2022. After that, barring any other changes, the program would revert to the original PSLF rules, which were much more restrictive. The Ministry of Education is working on revamping the PSLF regulations to adopt more permanent changes, but any final regulations would not be effective until later in 2023.
Earlier this month, student loan borrower advocacy organizations called on the Biden administration to extend the PSLF’s limited waiver program beyond the Oct. 31 deadline. Citing data suggesting the program may be underutilized, the Student Loan Borrower Protection Center (SPBC) urged the Education Department to push back the program’s end date.
“We’ve only scratched the surface” of relief under PSLF, said SBPC Executive Director Mike Pierce in a statement earlier this month. “Secretary Cardona must recognize that you can’t have too much of a good thing – extend the waiver now and provide debt relief to millions in the future.”
A coalition of unions defending their members expressed similar concerns. “The PSLF’s limited exemption represents a unique opportunity for our educators to access student debt forgiveness,” said Becky Pringle, president of the National Education Association (NEA), one of the largest unions teachers in the country. “However, its rollout was quick, and by the time officials understood the new temporary rules, the program was halfway done…Educators and public service workers need more time to get forgiveness they deserve.”
Biden eyes broader student loan waiver
The Biden administration has not publicly indicated whether it plans to extend the limited PSLF waiver beyond October. But senior White House officials, and President Biden himself, have suggested a broader student loan forgiveness initiative may be underway. Biden told reporters earlier this week that a decision on mass student loan forgiveness would be made in the coming days or weeks.
Any large-scale student loan forgiveness would likely have a fairly low cap, as Biden has rejected calls to forgive $50,000 or more in student loan debt. And reports say administration officials can also impose income restrictions.
Further Reading on Student Loans
‘Yes’ – Biden to soon decide on student loan relief and gas tax holiday to fight inflation
Biden Reportedly Close to Making a Decision on Widespread Student Loan Forgiveness – Here’s Where It Stands
Biden’s new student loan forgiveness changes could end up costing some borrowers
Want student loan forgiveness? To qualify, borrowers may need to do this first