WASHINGTON — The U.S. Department of Education has announced major changes to a federal student loan forgiveness program it says could provide relief to more than 550,000 borrowers working in government and nonprofit sectors.
That includes approximately 22,000 borrowers who will automatically be eligible for student loan forgiveness without needing to take additional steps, the department said.
The changes involve the Public Service Loan Forgiveness program, through which the government forgives remaining federal student loan debt for qualifying public-sector workers after they have made monthly payments for 10 years.
But as CNN noted, the program has long been criticized for being difficult to navigate, with borrowers receiving little help from their loan servicers. Many borrowers have said they found out they weren't eligible for forgiveness only after making what they thought were a decade's worth of qualifying payments, CNN reported.
‘Restore the Promise’
In making its announcement, the Department said it will “restore the promise” of the debt relief program through a series of actions to be implemented over the “coming months,” according to the memo cited by CNN.
These actions include offering a one-time limited waiver authorizing all prior payments from student borrowers to count toward the program, including loan types and payment plans that previously did not qualify for forgiveness. The waiver will continue through Oct. 31, 2022, according to the memo.
CNN reported more than one-million borrowers have made at least one qualifying payment, but only a small percentage of those enrolled have received forgiveness.
Commitment to Military
The Department of Education said it is also committing to helping military service members and federal employees access the Public Service Loan Program's resources.
"Next year, the Department will begin automatically giving federal employees credit for PSLF by matching Department of Education data with information held by other federal agencies about service members and the federal workforce," the agency stated, CNN reported.
For military service members, time spent on active duty will be credited towards the program, even if loans were on deferment or forbearance.
"Federal Student Aid will develop and implement a process to address periods of student loan deferments and forbearance for active-duty service members and will update affected borrowers to let them know what they need to do to take advantage of this change," according to the memo.