Major changes to the Public Service Loan Forgiveness (PSLF) program are finally here, and they’re bigger than previously estimated.
Under the previous administration, the Department of Education had the PSLF program, but it was made so restrictive that an extremely small number of people actually qualified. Fewer than 60 over a 10-year period, in fact. It got a little better from 2019 to 2021, but it was still essentially useless.
Intended to encourage long-term employment in the public sector, the PSLF is intended to reward public service workers by erasing their student loans. Under the new changes to eligibility and application, over 10,000 borrowers have had $715 million in federal student loans forgiven since October, and another 20,000 will be notified between now and mid-December.
According to Education Secretary Miguel Cardona in a statement on November 11, 2021, these 30,000 borrowers will see a collective $2 billion in loans forgiven, give or take. Original estimates were approximately 22,000 borrowers and $1.74 billion.
“This is fantastic news for those who will have their debts canceled and demonstrates how the Biden administration has the power to make life better for all people with student debt,” said Mike Pierce, executive director at the Student Borrower Protection Center.
Most federal student loans have been suspended for the last 18 months due to the pandemic, but that grace period will end before February 2022.
“The temporary waivers announced by the Department of Education have been an actual life-changing event for many of the borrowers we work with,” said Betsy Mayotte, president of The Institute of Student Loan Advisors.
Perhaps the most crucially affected group is educators. The average teacher begins teaching with over $50,000 in student debt, and 15 percent of teachers have over $100,000 in student debt. Under these major changes, every teacher who has worked for 10 years or more at any public or charter school is eligible to have their remaining debt erased.
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