Spotlight on Student Loans:
Big Changes Coming to Public Service Loan Forgiveness
Expert and Public Comment Informs Student Loan Reforms
A couple of weeks ago, Secretary of Education Miguel Cardona announced a number of changes to the federal Public Service Loan Forgiveness program, changes that are meant to preface a sweeping overhaul over the next year. This comes following negotiated rulemaking sessions back in June in which industry experts—including Navigate—testified on the broken PSLF system and what they saw as necessary to fix it. The Dept. of Education then opened a public comment period, giving borrowers a chance to share their own repayment story and join the PSLF conversation. Now, after months of waiting, we’re seeing the first glimpses of the Biden Administration’s plans to reform the embattled program.
Immediate Changes: Public Service Loan Forgiveness Limited Waiver Opportunity
Starting October 6th, the Dept. of Ed. is offering what they’re calling a PSLF “Limited Waiver,” which temporarily changes the rules, granting certain borrowers a shorter path to PSLF. A select few borrowers will automatically qualify for PSLF, while others will be able to make previously ineligible past payments now qualify towards PSLF. In short, if you were working full-time for a qualifying public service employer and were making payments on your Direct, FFEL, or Perkins loans, those payments will count towards your 120 qualifying payments for PSLF, regardless of payment plan, whether it was made on time or in full. The one caveat is that you need to consolidate your FFEL or Perkins federal loans into Direct Loans by Oct. 31, 2022.
Further Student Loan Reform Down the Pike
The PSLF Limited Waiver period comes shortly after the Dept. of Ed. announced that it was working on a much broader reform of the federal student loan program, including PSLF. While they have yet to take their final shape, we know they will address a number of key areas that have plagued borrowers for years: access to permanent disability discharge, interest capitalization, confusing and expensive payment plans, PSLF, and more. You can read more about the issues the Dept. of Ed is hoping to address, or you can wait it out: these are all big topics, ones that will likely take some time to solve. In the meantime, we will continue to advocate for borrowers and provide updates as changes unfurl.
Good things are coming: we just have to be patient and vigilant. If you have any questions, we’re always here for you—drop us a line.
If you’re pursuing Public Service Loan Forgiveness and you haven’t met with us yet, schedule your free 15-minute Discovery Session to find out if you qualify for PSLF, or what you can do if you don’t.