Education Secretary Miguel Cardona will propose modifications to the Public Service Loan Forgiveness Program that will make it simpler to qualify.
Education Department Miguel Cardona announces the cancellation of student loans.
Cardona Announces Loan Forgiveness and Cancellation
In a recently published article in US News, on Wednesday, the Biden administration unveiled major changes to the federal Public Service Loan Forgiveness Program, a government promise to provide debt relief to teachers, nurses, firefighters, and others who work in public service, but one beset by complicated eligibility rules and servicing errors that have made it nearly impossible to take advantage of.
According to the Department of Education, more than 22,000 debtors will have their debts canceled immediately; and another 27,000 will have their loans forgiven provided they obtain confirmation for prior payments. This implies that over 550,000 debtors will be eligible for loan forgiveness.
Education Secretary Miguel Cardona said, "Borrowers who devote a decade of their lives to public service should be able to rely on the promise of Public Service Loan Forgiveness. The system has not delivered on that promise to date, but that is about to change for many borrowers," according to a published article in Newsweek.
Read Also: Department of Education Cancels Student Loans After Biden Comes Into the Office
Temporary Changes in the Student Loan Forgiveness and Cancellation
The program was established by Congress as a way to reward college students who go into public service. The program offered to eliminate the rest of their federal student debts if they made 10 years of payments. Those debtors will now be eligible to have their debts forgiven as a result of the interim adjustments.
However, more than 90 percent of applications were turned down. Many borrowers have discovered after ten years of payments that they had the incorrect kind of federal loan or repayment plan to be eligible for the program. Thousands of people have been left with debt they believed would be forgiven, according to a published article in USA Today.
Borrowers who have worked 10 years in qualified employees will be eligible for debt relief through October 2022, regardless of the kind of federal loan or repayment plan they have. Previously ineligible loan installments will now be counted, bringing some borrowers closer to the finish line.
Borrowers using Federal Family Education Loans, a now-defunct loan program that provided federally guaranteed loans via banks, would benefit the most. Loans from that program, which ended in 2010, were previously ineligible; but under the new regulations, they may now be canceled.
Advocacy Groups Welcome the Temporary Changes
The modifications are intended to be a temporary remedy while the agency examines long-term solutions via the federal rulemaking process. Hearings were held this week by the department as part of a process that may result in significant changes to federal student assistance programs, including the public service benefit.
In a recently published article in Reuters, the interim adjustments were welcomed by advocacy organizations. It's a "big step in the right direction," according to Aaron Ament, head of the legal organization Student Defense, which has defended students in litigation against the program.
The American Federation of Teachers president, Randi Weingarten, said the move is good, and it is a collective sigh of relief as the Kafkaesque system that has crushed far too many aspirations finally begins to crumble.
Related Article: FAFSA Deadline 2022: $30,000 Aid for College Students on the Way, Larger Than Stimulus Checks
