The US Department of Education reported that over the last 18 months, the US has approved more than $42 billion in federal student loan debt forgiveness for over 615,000 borrowers in public service positions.
The program aims to encourage more people to work in public service positions.
US Approves One-Time Adjustment to Increase Student Loan Forgiveness
Teachers, librarians, nurses, public interest attorneys, members of the armed forces, and other public servants are eligible for the Public Service Loan Forgiveness program.
After 10 years of service in the public interest or 120 payments per month, it cancels the borrower’s remaining school debt.
The scheme is separate from President Joe Biden’s student debt relief plan, which would wipe out or lower loans for millions of borrowers regardless of what industry they work in.
Whether such a strategy can move forward is currently being debated by the US Supreme Court.
The Public Service Loan Forgiveness program, or PSLF, was introduced in 2007, but strict guidelines led to the rejection of more than 90% of applicants, according to the Department of Education in 2019.
The government temporarily loosened the rules in October 2021, making it simpler for applicants to submit applications and receive approval.
These lenient specifications expired in October 2022.
Nonetheless, there is still time for debtors who want to boost their payment count. They have until the year’s end to submit an application for the one-time account adjustment.
Borrowers with direct loans from the William D. Ford program will receive advantages through the one-time account adjustment that are comparable to those provided by the limited PSLF waiver.
As long as they submit a consolidation application by the end of 2023, borrowers who do not have direct loans can consolidate and earn PSLF credit for earlier payments as part of this adjustment.
The assistant public defender in Orlando, Florida, Beth Bourdon, was one of the recipients of the PSLF waiver.
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Biden Administration Confirms Restart of Student Debt
Another aspect of life prior to the pandemic is also making its much anticipated—and for many, dreaded—return by the end of June, according to a top Biden Administration official.
According to Miguel Cardona, secretary of education, who spoke before the Senate Committee on Appropriations on Thursday, the three-year moratorium on necessary payments and interest for federally held loans, which started at the start of the pandemic, would start to expire on June 30.
In that case, payments would start up again no later than September.
Prior to June 30, the Biden administration had stated that the student loan payment suspension, which had already been prolonged eight times, would end 60 days after the Supreme Court’s decision on whether to permit Biden’s expansive student loan forgiveness program to move forward.
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