The Education Department said Wednesday it will drop some of the toughest requirements around Public Service Loan Forgiveness.
The Biden administration is temporarily relaxing the rules forthat has been criticized for its notoriously complex requirements — a change that could offer debt relief to thousands of teachers, social workers, military members and other public servants.
But more than 90% of applicants have been rejected. After making a decade of payments, many borrowers have found that they have the wrong type of federal loan or repayment plan to be eligible for the program. Thousands have ended up stuck with debt they thought would be cleared.Through October 2022, borrowers who have worked 10 years in a qualifying job will be eligible for loan relief no matter what kind of federal loan or repayment plan they have.
said. “The system has not delivered on that promise to date, but that is about to change for many borrowers.”It’s a particular boon for borrowers with Federal Family Education Loans, from a defunct loan program that issued federally backed loans through banks. Loans in that program, which ended in 2010, were previously ineligible but can now be cancelled through the updated rules.
The changes are seen as a short-term fix while the agency considers permanent improvements through a federal rulemaking process. The department started holding hearings this week as part of a process that could bring sweeping change to federal student aid programs, including the public service benefit.
Rep. Virginia Foxx, R-N.C., the top Republican on the House education committee, said President Joe Biden's administration is “circumventing Congress through executive action.”
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