$ 2.4 billion in student loan forgiveness for 38,000 borrowers in preparation, education ministry says
The Education Department on Friday provided updated statistics for borrowers who have been approved for student loan forgiveness under a new expanded program announced by the Biden administration in October.
“To date, we have identified 38,000 borrowers who will receive $ 2.4 billion in loan cancellations,” Education Secretary Miguel Cardona said in a tweet on Friday, “and more are on the way.” .
Student Loan Waiver under PSLF Limited Waiver
Billions of student loan relief are provided to borrowers under the “PSLF Limited Waiver” – a temporary extension of the Public Service Loan Forgiveness (PSLF) program, a program created by Congress in 2007 for loan borrowers students who commit to working full-time for public or non-profit organizations. Plagued by complex rules and poor oversight for years, the PSLF has long suffered from high rejection rates and widespread criticism. The new waiver program, first announced by education ministry officials on October 6, eases key PSLF program requirements by temporarily allowing more categories of federal student loans and repayment plans to qualify .
The ministry’s latest statistics have exceeded earlier projections for initial relief, and even more borrowers are expected to receive student loan forgiveness under the PSLF waiver program in the coming months. Borrowers with Federal FFEL Student Loans and Federal Perkins Loans had been excluded from the PSLF program for years. But by consolidating their loans through the Federal Direct Consolidation Program and submitting the required forms to certify their employment, these borrowers may be able to have past payments counted under the limited PSLF waiver, provided they act before October 31, 2022. The ministry has established a website to provide advice to borrowers.
Other potential changes to the delivery of civil service loans may be in the works
The Biden administration enacted the limited waiver of the PSLF using emergency executive authority. As a result, the relief is only available for a limited time – until October 31, 2022. But the administration is also considering other more permanent changes to the PSLF program.
Last week, the Department hosted a negotiated rule-making session on a draft regulatory overhaul governing the PSLF. The administration offers a number of enhancements designed to streamline the program after waiver expires, including automating job certifications and removing red tape and application forms, and clarifying the definition a âqualifying paymentâ to include payments divided into installments or paid in advance or in advance. The administration is also considering allowing the counting of certain deferral and abstention periods, as well as payments made before consolidation. The Department of Education also hopes to create a formal appeal or reconsideration process for refused applications.
Advocates for student loan borrowers, however, want the ministry to go even further, for example by expanding the definition of qualifying job to include certain contractual roles and public health positions, and allowing the phased cancellation of student loans over the course of time. the repayment term of a borrower (currently, borrowers must make at least 120 âqualifying paymentsâ before obtaining a loan forgiveness).
The ministry’s negotiated rule-making committee, which is made up of key stakeholders and advises the ministry on proposed regulatory changes, failed to reach consensus last week on the proposed reforms. It will now be up to the Biden administration to decide how to reform the PSLF after the limited PSLF waiver program expires next year. More details on additional PSLF reforms are expected to be released later in 2022.
Advocates continue campaign to convince Biden to extend student loan payment hiatus and write off student debt
The $ 2.4 billion in student loan cancellations announced today by the Education Department is only a small fraction of the estimated $ 1.8 trillion in outstanding student debt. Student loan borrower advocates and their allies in Congress continue to push the Biden administration to go much further by extending the nationwide student loan payment hiatus (scheduled to end Jan.31), halting all accrued interest or by canceling a fixed amount. federal student loan debt amount for each borrower.
“If the break in student loan payments is not extended, borrowers will be slammed with hundreds of dollars in payments per month,” Senator Elizabeth Warren (D-MA) said in a tweet earlier this week. “[The President] can solve this problem and #CancelStudentDebt with a stroke of the pen. Waiting longer will hurt families and wreak havoc on our entire economy. “
President Biden has expressed skepticism about his legal power to unilaterally write off student debt without Congress, but Senator Warren and other borrower advocates have argued that the higher education law gives him such authority. . So far administration officials have signaled that they are moving forward with resuming repayments.
Further reading on student loans
Student loan waiver: Ministry of Education clarifies rules for new expanded program
Will Biden extend student loan hiatus because of Omicron? Some lawyers and lawmakers say it should.
Big changes to come in student loan repayments in 2022
New Student Loan Income-Based Payment Plan Details: Some New Benefits, But Advocates Are Disappointed