The federal program, which broke its promise to ease student debt to thousands of public servants, including teachers, police and firefighters, is trying to get it right.
On Wednesday, the US Department of Education announced a drastic change in the civil service loan exemption program after thousands of borrowers applied for an exemption, nearly all of which were rejected by the federal government.
After making a 10-year payment, many noticed that they had the wrong type of federal loan or repayment plan to qualify for the program. Thousands of people are riding on debt that they thought was written off.
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Due to a temporary change until October 2022, these borrowers are eligible to liquidate their loans.
The redesign is also designed to allow the borrower to correct the error and count the payments the borrower was attempting to make to the program. The government has said that more than 550,000 borrowers (those who have already integrated their loans) should reduce the time they have to pay for a discount.
The change will immediately eliminate the debt of 22,000 borrowers to reach $ 1.7 billion, the agency said. The government has estimated that an additional 27,000 borrowers could be relieved of about $ 2.8 billion in debt if they can prove they have qualified jobs.
If you have these loans, here are the steps you can take to get relief:
What is a PSL loan? How were they born?
Public Service Loan Forgiveness is a program launched in 2007 to guide more college graduates into public service. As long as they paid off a federal student loan for 10 years, the program promised to erase the rest.
However, this program has proven to be ruthless. According to the Ministry of Education, before Wednesday’s announcement, only 16,000 borrowers had their debt authorized under the program. About 1.3 million people are trying to repay their debt through this program.
One of the most problematic aspects of canceling civil service loans: Many borrowers did not have the right type of loan and did not know they were not entitled to relief.
When the loan cancellation program was first introduced, many of the federal government loans were federal family education loans or loans made through private organizations but insured by the government. federal.
The government stopped offering these loans in 2010 and now relies on the types of direct loans it allows. The Education Ministry said about 60% of borrowers with approved employers have FFEL loans.
Who is eligible for student loan allowances?
The government previously limited the eligibility of public service loan exemption programs to certain types of federal student loans and certain repayment plans.
However, until October 2022, borrowers who have worked for 10 years in a skilled job are eligible for loan relief regardless of what type of federal loan or repayment plan they have.
Previous ineligible loan repayments are accrued and some borrowers are approaching forgiveness. This should be especially helpful for federal family mortgage borrowers.
Among other changes, the department will allow members of the armed forces to count active hours for 10 years, even if payments are suspended during that period.
According to Betsy Mayotte, president of the Student Loan Advisors Association, if a borrower does not know what type of loan they have, they can request that information from the loan manager or go to the federal website for financial assistance. I can do it.
If you are unsure what type of federal loan you have, log into your account on StudentAid.gov and[マイエイド]Go to page[ローンの内訳]You can see what loan you have by scrolling down to the section.
What steps must I take if I am eligible?
The changes to the loan exemption program are in two parts.
The agency first relaxed some of the rules that prevented qualified borrowers from repaying loans with limited exemptions. For example, the government allows personal loan payments to count towards the total number required for forgiveness.
The utility loan exemption will be available to borrowers with direct loans, federal family education loans, and Perkins loans.
The ministry said it would automatically lend to borrowers who have already received direct funding and have proven to work in a qualified field. Others who are not enrolled in the program or have ineligible federal loans will need to apply for a forgiveness, which may require them to consolidate their loans. The borrower must apply before October 2022.
For more information on loan consolidation, please visit StudentAid.gov / Manage-Loans / Consolidation.
The Education Department also plans to review all denied public service loan cancellation requests and give federal officials automatic credit for the cancellation.
Other changes occur more slowly because of regulations made by “rule making,” a long and complex bureaucratic exchange between government and other stakeholders.
For more information, please visit StudentAid.gov / PSLFWaiver.