Home / Federal Forgiveness / Student loan forgiveness program Changed: Biden Administration makes it Easier
Student loan forgiveness program Changed

Student loan forgiveness program Changed: Biden Administration makes it Easier


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The Education Department announced plans to revamp the financial incentives program. Congressional staff and members expect the overhaul announced by the Department of Education to make positive changes to a troubled student loan forgiveness program for public sector employees and military personnel.

President of the Congressional Black Associates, Herline Mathieu said, “We hope this change will help to alleviate the economic hardship that so many endure as a repercussion of student loans.”

The Public Service Loan Forgiveness Program established in 2007 offered college students a deal. If they work in government or for qualifying nonprofits and make their monthly student loan payments for a decade, the federal government will forgive your remaining loan balance.

But, the program proved to be a headache for both borrowers and the government. Several public servants’ access to the program has been in limbo since they learned they had paid the wrong amount in monthly payments or taken out the wrong type of student loans. Former President Trump proposed the cancellation of the program in every budget he sent.

It was announced by the Education Department on 6 Apr 2021 that it would reform the program in such a way that loan forgiveness would only be granted to borrowers who made a good faith effort to comply with its terms. Future borrowers will also benefit from the program’s simplification going forward.

The first step is setting up a temporary waiver so that federal employees and other public servants who have tried to abide by the program’s terms can take advantage of its benefits. Borrowers will have the opportunity to consolidate their loans into the correct Direct Loan program until Oct. 31, 2022.

The Education Department said in a press release, “Counting prior payments on additional types of loans will be particularly important for borrowers who have or had loans from the Federal Family Education Loan program.” About 60% of borrowers with certified employment for PSLF fall into this category. Some FFEL borrowers report receiving inaccurate information from their servicers regarding progress toward PSLF. According to a recent report by the Consumer Financial Protection Bureau, some FFEL servicers have systematically misled borrowers about access to the PSLF program.

Additionally, the waiver will apply to prior payments that were not eligible for Student loan forgiveness under the public service loan forgiveness program because of its overly strict rules. In some cases, the department said, borrowers’ payments were not counted because they were miscalculated by a penny or considered late by just a few days.

Also announced by the department, it will conduct a review of previous denials and try to correct processing errors.

Offing permanent changes

Members of the military will be credited for the time they spent on active duty, even though their loans are technically on deferment or in forbearance. So that their time in government counts towards the program.

Moving forward

The Edu. department said, “it will issue new regulations aimed at simplifying the rules for monthly payments, and it will simplify the application process and better clarify for the program.”

The department has launched a tool to help the borrowers; an FAQ about the temporary waiver is also available at studentaid.gov.

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