6th October (WNN) — President Joe Biden’s administration said Wednesday that it is temporarily expanding the Education Department’s school loan forgiveness program to make it easier for public servants to obtain debt relief amid hardships caused by the COVID-19 pandemic.
Under the change, the Public Service Loan Forgiveness Program will recognize certain payments that did not count toward the 120 monthly payments previously required to qualify for forgiveness.
The department said the change would bring half a million public servants closer to complete loan cancellation.
Officials also said that about 22,000 borrowers would be automatically eligible for forgiveness without taking any action — and 27,000 borrowers could qualify if they verify their period of employment.
Under the program, public employees qualified for loan forgiveness if they made 120 payments and worked full-time as a public servant for 10 years. At that point, the balance will be cancelled.
The department said the change will last at least until November 2022 and public servants will have about a year to submit their application for cancellation of the loan.
Over the years, the Public Service Loan Waiver Program has been criticized as overly complex and difficult to understand. The New York Times reported earlier this year that 98% of applicants to the program were turned down due to lax management and complex rules.
“Borrowers who dedicate a decade of their lives to public service should be able to rely on the promise of public service loan forgiveness,” Education Secretary Miguel Cardona said in a statement on Wednesday. “The system has not delivered on that promise to date, but it is about to change for many borrowers who have served their communities and their countries.”
The department said borrowers who have consolidated loans — including previously ineligible loans — may be immediately eligible for $1.74 billion in forgiveness.
“Teachers, nurses, first responders, service members and so many public service workers have our backs, especially in the midst of the challenges of the pandemic,” Cardona said. “Today, the Biden administration is showing that we have their backs, too.”
Wednesday changes restrictions on the types of repayment plans and a requirement that payments be made in full and on time. In addition, the overhaul will allow borrowers to effectively appeal denied forgiveness claims, which the department has not done before.
The American Federation of Teachers sued former Education Secretary Betsy DeVos, saying the department ignored some borrowers’ concerns about misinformation and administrative mistakes, which they say blocked loan forgiveness.
“We’ve uncovered Kafka-esque, absurd administrative hoops over and over again, with the Department of Education and servicers pushing people to use public service loan forgiveness,” AFT president Randy Weingarten told The Washington Post. “What the department is doing is cleaning up the mess created by DeVos and servicers.”
Advocates and critics have met with Biden since he took office to take serious action to forgive billions of dollars in federal student loans.
“Including borrowers eligible for immediate forgiveness under these actions, the Biden-Harris administration has now approved more than $11.5 billion in loan cancellations for more than 580,000 borrowers,” the department said in a statement.