The Public Service Loan Forgiveness (PSLF) Coalition, which NASFAA is a member of, sent a letter to President Joe Biden urging for the extension of the temporary PSLF waiver through July 2023.
The coalition, which consists of over 90 public service agencies and organizations, states that while “there have been concentrated efforts to educate people” about the PSLF waiver, there are still borrowers who need to be reached. Currently, the waiver is set to expire on Oct. 31, 2022. Similarly in August, a group of 20 state attorneys general wrote a letter calling on the Biden administration to extend the PSLF waiver’s deadline past October 31 and implement expansions to the program that would make PSLF available to more borrowers.
“We also know that our work has only just begun,” the coalition wrote. “There are thousands more borrowers who would benefit from the limited waiver who the administration has not yet reached and who are not yet aware that they may be eligible for student debt forgiveness.”
In October 2021, the Department of Education (ED) announced the temporary PSLF waiver, which gives borrowers credit for prior payments that would not otherwise count toward PSLF. Any prior payments made while working for a qualifying employer still count as a qualifying payment, regardless of loan type or repayment plan.
The PSLF Coalition argues that “only a fraction” of the public servants with student debt are “in the pipeline for PSLF.” The coalition wrote that while ED has information from only 1.3 million borrowers with eligible employment and outstanding student loan debt, 9 million public service workers are eligible for PSLF, according to the Student Borrower Protection Center.
Additionally, a paper published in the National Bureau of Economic Research in July found that full participation of the PSLF waiver program would narrow the racial gap in student debt burden and largely benefit teachers and health care workers. The paper estimates that full participation in the PSLF waiver program would account for over $100 billion in loan forgiveness available to as many as 3.5 million borrowers.
“We ask that the limited waiver be extended until July 2023, which is the effective date of the revisions being made to PSLF and other programs through the Higher Education Act proposed rulemaking your administration has undertaken,” the coalition wrote. “Failure to extend the waiver until these new rules take effect would lead to confusion for borrowers and employers, and lead to significant administrative challenges to the Department and its loan servicing partners.”
The coalition also notes that because of the congressional passage of the Joint Consolidation Loan Separation Act, some borrowers would be eligible for the waiver with little time for ED to provide guidance and outreach for those borrowers.
“We urge the administration to extend the PSLF limited waiver and thereby make the program more accessible to eligible borrowers and more effective at relieving the burdens of student debt from those committed to serving their communities,” the coalition wrote.
Publication Date: 9/28/2022