First Wave of Borrowers Gets $715 Million In Forgiveness Under New Limited PSLF Expansion
According to a tweet from Education Secretary Miguel Cardona on Thursday, 10,000 borrowers who were on PSLF have already had $715 million erased because of the change in policy announced on October 6, 2021.
Second Automatic Tranche Expected to Follow
Another 20,000 will be notified in the "coming weeks." Altogether, according to Cardona, 30,000 borrowers will see $2 billion forgiven.
"This is fantastic news for those who will have their debts cancelled and demonstrates how the Biden administration has the power to make life better for all people with student debt," Mike Pierce, executive director at the Student Borrower Protection Center. "With payments currently set to restart in less than 90 days (about 3 months), there is much more work to be done for our public servants and all Americans with student loan debt."
The PSLF program, which was established by Congress in 2007, allows government and non-profit employees with federally backed student loans — such as teachers, firefighters, nurses, first responders, service members, and other public servants — to apply for forgiveness after completing 120 monthly payments under a qualifying repayment plan.
22,000 student loan borrowers with combined loans, who were previously ineligible to be counted toward loan forgiveness, were expected to become "immediately eligible" for $1.74 billion in forgiveness because of the ED's policy change in October.
"The temporary waivers announced by the Department of Education {DOE} have been an actual life changing event for many of the borrowers we work with," Betsy Mayotte, president of The Institute of Student Loan Advisors.
Mayotte said she had received dozens of notes from borrowers who, after battling for loan forgiveness for many years — and even decades — "who woke up this week to find that their balance is finally zero."
Some Will Have to Take Action to Receive Similar Forgiveness
While the Department has automatically granted this relief to those who automatically qualify, many other borrowers will need to take certain steps to have their student loans canceled under the Limited PSLF Waiver.
Borrowers with FFEL (Federal Family Education Loan) or Perkins loans will need to consolidate them via the government Direct consolidation program before submitting PSLF Employment Certifications covering previous time periods. Direct loan borrowers who have not yet certified all their previous and current public service work will be required to file all their required PSLF Employment Certification forms beforeOctober 31, 2022, to qualify.
Work In Public Service? Do this Next.
If you are currently employed in public service and enrolled in the PSLF program, TitanPrep can assist you with the steps you need to take to consolidate your loans, if necessary, and file the required PSLF / TEPSLF (Temporary Expanded PSLF) forms to receive forgiveness under this limited time program. While specializing in document preparation management and data storage, the friendly TitanPrep team are highly trained. We can assist you with navigating your repayment plan on your own or with our assistance.
The PSLF limited waiver is only good through October 2022, and the mandatory steps can sometimes take months to complete, so contact TitanPrep today.