By Owen Daugherty, NASFAA Staff Reporter
The Department of Education (ED) has issued the first round of loan forgiveness under the temporarily expanded Public Service Loan Forgiveness (PSLF) program made possible by a waiver issued last month, with about 10,000 borrowers receiving relief to date.
Those borrowers have received roughly $715 million in student loan forgiveness through the temporary waiver. And an additional 20,000 borrowers are expected to receive an additional $1.2 billion in student loan forgiveness in the near future, an ED spokesperson told NASFAA. In total, over 30,000 borrowers will receive an estimated $2 billion in loan forgiveness as a result of the PSLF waiver.
Just last week borrowers started receiving notifications that additional payments were counted toward their PSLF progress, many resulting in forgiveness of loans. The euphoria was palpable across the internet as many borrowers shared their experiences finding out their loans had been forgiven on Twitter and online message boards.
When announcing the temporary waiver, which runs through Oct. 31, 2022, ED said it will now allow eligible borrowers to count payments from all federal loan programs or repayment plans toward forgiveness, including those who made payments on loans originated through the now-defunct Federal Family Education Loan (FFEL) program, borrowers who consolidated their FFEL loans into the Direct Loan program, and those who had already made 120 payments on a Direct Loan, but in an ineligible repayment plan.
Additionally, payments made by active duty military members whose loans are deferred or in forbearance while they’re serving will now count toward forgiveness through PSLF.
ED added that officials would review borrower accounts for rejected payments, and would adjust a borrower’s total number of qualifying payments accordingly for Direct Loan borrowers who have already certified their employment for PSLF.
While some borrowers have experienced the joy that has come from the temporary waiver, others are still waiting to see their accounts reflect the changes.
Federal Student Aid's (FSA) Chief Operating Officer Richard Cordray in a letter to public service workers last week said the complex changes to the PSLF program “are hard to process and execute.”
“They require large-scale data and processing work, which takes time,” he added. “We are working as quickly as possible to update your account and give you clear and accurate information. This may take several months.”
ED officials said they were working with FedLoan Servicing, which manages the PSLF program and is operated by the Pennsylvania Higher Education Assistance Agency (PHEAA), to notify borrowers as quickly as possible,
In addition to the PSLF temporary waiver, ED is seeking to make regulatory changes to the program through the negotiated rulemaking process in hopes of achieving a longstanding program overhaul, as Cordray noted in his letter that the waiver is only temporary.
Publication Date: 11/15/2021