Zahra Nealy was in the shower, listening to the radio, when she heard NPR reporting on Friday that the U. S. Department of Education would use its authority to help borrowers and relax the rules of the troubled Public Service Loan Forgiveness (PSLF) program."That's me! You're talking about me," Nealy, who works for a Southern California nonprofit, remembers thinking. "It's really hope. In a desperate time."On Wednesday, borrowers like Nealy — who have felt stymied by the federal program meant to forgive the student loan debts of longtime public servants — got more reason for optimism, as the department officially released the details of its overhaul plans."Borrowers who devote a decade of their lives to public service should be able to rely on the promise of Public Service Loan Forgiveness," said U. S. Secretary of Education Miguel Cardona in a press release announcing the changes. "The system has not delivered on that promise to date, but that is about to change for many borrowers who have served their communities and their country."Up to this point, to qualify for PSLF, borrowers have had to meet a handful of requirements:Now, the department says, it will use its authority to give borrowers a time-limited waiver — essentially relaxing several of these rules retroactively, so that previously disqualified loan payments can now be counted toward forgiveness. The department estimates that this waiver could have an enormous impact on borrowers, with roughly 22,000 immediately eligible to have their loans erased automatically. Another 27,000 borrowers could likewise see their debts disappear if they're able to prove they were working in public service at the time they made previously ineligible payments. By comparison, 16,000 borrowers have had their loans forgiven under PSLF since the program was created. In the past, monthly loan payments were disqualified not only for being received late but also for being even slightly different from the amount required. Now, the department says, past-due payments will be counted — as will payments that were disqualified for differing slightly, even by just a few cents, from the amount due. The PSLF program requires that a borrower be enrolled in one of a few specific repayment plans, including the Income-Based Repayment Plan (IBR) and the Pay As You Earn Repayment Plan (PAYE). But because of complaints from borrowers about loan servicing companies misinforming them or automatically switching them to disqualified plans, the department says these past ineligible payments will now count toward forgiveness, at least temporarily. PSLF was designed to encourage borrowers to consolidate their old federal loans, known as Federal Family Education Loans (FFEL), into federal Direct Loans. But for myriad reasons — on a spectrum from mistakes to mismanagement to misconduct — loan servicing companies and the Education Department muddied this message to borrowers.
All data is taken from the source: http://npr.org
Article Link: https://www.npr.org/2021/10/06/1043332307/public-service-loan-forgiveness-education-department-overhaul
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