These 9 million student loan borrowers now qualify for student loan forgiveness.
Here’s what you need to know — and what it means for your student loans.
According to a new analysis on student loan forgiveness released today:
- More than 9 million public service workers with federal student loans are eligible for student loan cancellation through the Public Service Loan Forgiveness program;
- However, less than 150,000 student loan borrowers have received student loan forgiveness under the federal program;
- Less than 15% of 9 million public service workers with student loan debt have filed paperwork to track their progress toward student loan forgiveness; and
- the Public Service Loan Forgiveness program has canceled student loan debt only for 130,730 student loan borrowers, which is less than 2% of the eligible population.
The Student Borrower Protection Center (SBPC) released a state-by-state, interactive map that projects the number of student loan borrowers who are eligible for student loan cancellation, who are on track to get student debt cancellation, and who have already received student loan cancellation. SBPC is launching a campaign to help the remaining 98% of eligible student loan borrowers access student loan forgiveness.
How to get student loan forgiveness
Congress created the Public Service Loan Forgiveness program in 2007, and it’s still active today. If you have significant student loan debt, it’s one of the best ways to get student loan forgiveness while also serving your community. Public service loan forgiveness is available to federal student loan borrowers who work full-time (at least 30 hours a week) for a qualified public service or non-profit employer. Make sure to complete an Employer Certification Form annually or whenever you change employers, and then submit it to the U.S. Department of Education. You’ll need to enroll in an income-driven repayment plan and make at least a majority of your federal student loan payments while enrolled in that plan. After 120 monthly student loan payments, you can qualify for student loan forgiveness of your remaining federal student loan balance. President Joe Biden announced major changes to student loan forgiveness to help more student loan borrowers qualify. For example, there is a one-time limited student loan forgiveness waiver for student loan borrowers to count prior student loan payments that previously didn’t count toward student loan forgiveness. This includes, for example, late student loan payments, partial student loan payments or student loan payments made under the wrong student loan repayment plan. According to SBPC, approximately 7.6 million eligible public service workers with no public service loan forgiveness paperwork on file with the U.S. Department of Education must certify their employment and consolidate their loans, if necessary, before the limited PSLF waiver period ends on October 31, 2022.
Senators propose major changes to student loan forgiveness
U.S. Senators Sheldon Whitehouse (D-RI) and Jeff Merkley (D-OR) proposed new legislation — the Simplifying and Strengthening PSLF Act help more student loan borrowers qualify for student loan forgiveness. This new legislation would:
- Get student loan forgiveness faster: Lower the number of required student loan payments from 120 payments over 10 years to 60 payments over 5 years;
- Count more student loan payments: Allow any prior period of student loan repayment to count as a qualifying student loan payment;
- Increase eligibility for servicemembers: Count student loan payments for active-duty military members or Peace Corps volunteers even if their student loans were in student loan forbearance or student loan deferment during their service; and
- Consolidate student loans: Allow Parent PLUS Loan borrowers and couples who previously joint-consolidated their FFEL federal student loans to re-consolidate their student loans into one Direct Loan.
The Biden administration is focused on revamping public service loan forgiveness to encourage more student loan borrowers to apply and get student loan forgiveness. This new legislation could gain some bipartisan support, since it’s tied to public service. As a presidential candidate, Biden also supported reducing the requirements for public service loan forgiveness to five years. However, Biden’s proposed to forgive $10,000 of student loans each year for five years. In contrast, this proposed legislation would cancel all federal student loan debt after five years. With temporary student loan relief ending soon and wide-scale student loan cancellation still an unknown, public service loan forgiveness could be a good way for you to get student loan forgiveness. Now is a good time to reconsider your plans for student loan repayment. Based on your unique financial situation, you should evaluate your best options for your student loans. Here are some popular ways to pay off student loans faster and save money:
- Student loan refinancing (lower interest rate + lower payment)
- Income-driven repayment (lower payment)
- Student loan forgiveness (federal student loans)