The U.S. Department of Education is easing requirements for Americans who work in public service roles to qualify for student loan forgiveness, paving the way for thousands to have their college debt erased after a decade of payments, regardless of the federal loan type.
Under the new rules announced Wednesday, borrowers who’ve made payments to federal loans for 10 years while working in a public service position, no matter the loan type or payment plan, will be eligible for forgiveness.
The new set of rules will be in place until October 2022 and is aimed at providing relief from financial hardships caused by COVID-19, federal officials said.
“The COVID-19 pandemic has placed a tremendous strain on public servants, making it even more critical that borrowers are able to access PSLF,” the department said in a statement. “Many public servants have been on the front lines of the pandemic, making personal sacrifices to keep the rest of us safe.”
The Public Service Loan Forgiveness program first launched in 2007 – though only 5,500 borrowers have benefited since then, according to a June report from the Department of Education.
Education officials say the program’s promise of relief has been largely unmet over the years due to “complicated eligibility rules, servicing errors or other technicalities.” The changes announced this week intend to improve the process, the agency said.
The education department also points to public service workers facing burnout and employee shortages amid the pandemic.
“Alleviating some of the financial strain associated with student debt can help borrowers in these sectors as they continue to navigate the fallout of this pandemic,” the statement continued.
To qualify for the program, borrowers must work for a government agency or an eligible not-for-profit organization. This includes positions with federal, state or tribal governments and roles in education, law enforcement, public health and other service sectors.
More than 90% of borrowers seeking loan forgiveness under the program have been rejected since 2007, CNBC reported, often because they were on an ineligible payment plan or opted for the wrong type of loan.
Those borrowers will now be eligible to have their loan debt erased, immediately benefitting 22,000 Americans, and ultimately bringing 550,000 borrowers closer to forgiveness by an average of 23 payments, the Department of Education said.
The updated rules will remain in place through next fall. For more information on qualifications and the new guidelines, click here.