The program, though, has been rife with confusing regulations that in some cases prevented many participants from being able to apply payments to their debts. Just 2% of program participants have had their loans erased since the program’s inception in 2007, statistics show.
“It needs to be simpler,” Education Secretary Miguel Cardona said in a video call Wednesday afternoon with three people who’ve had trouble completing the program: a math teacher from Oklahoma, an assistant professor in New York City and an U.S. Army National Guard officer in Pennsylvania.
“You were made a promise and it’s now our turn to deliver on that promise,” Cardona added.
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.
Federal officials said 22,000 borrowers — some of whom had loans that didn’t previously quality under the program — are immediately eligible for $1.74 billion in forgiveness. Another 27,000 borrowers could potentially qualify to have $2.82 billion of their loans erased if they certify they were working in public service when they made payments initially ruled out. Past-due payments will also be counted.
Officials say they’ll also make it easier for members of the military to get credit toward forgiveness while they serve. More than a half-million borrowers nationwide will see their progress toward meeting the program’s payment requirements grow automatically, with the average borrower being credited 23 additional payments, officials said.
“That’s beneficial to so many borrowers,” said Andrew Pentis, a certified student loan counselor at Student Loan Hero, a company that helps borrowers manage and eliminate debt.
Pentis said the changes are being made now in part to provide relief to workers who continue to struggle financially through the coronavirus pandemic. Pentis also noted President Joe Biden, under pressure from fellow Democrats to make sweeping changes to reduce student loan debt, has focused on easier initiatives, such as providing relief to borrowers defrauded by their schools.
About 1.6 million Georgians have student loan debt, owing nearly $66 billion, according to federal data. The totals include borrowers who moved to Georgia after completing college. The average federal and private student loan debt of Georgians is nearly $40,000, behind only Washington, D.C., and Maryland.
Pentis and others, though, believe more can be done to improve on Wednesday’s announcement. For example, a waiver allowing borrowers to count all payments made on loans from the Federal Family Education Loan program, which ended in 2010, or Perkins Loan program can now be counted toward canceling debts in the updated rules if it is submitted by October 31, 2022. This should be permanent, they say.
Experts say there are still too many technical rules that disqualify many applicants. Tim Renick, executive director of the National Institute for Student Success, housed at Georgia State University, said borrowers can be disqualified too easily from the program if they miss a few payments. Many borrowers, he noted, are starting their careers and struggling financially.
“If one has a personal medical emergency and needs to halt payments or make partial payments temporarily, should this disqualify one from PSLF?,” Renick said. “Historically, a public servant in either of these situations may well be turned down from the PSLF program.”
Atlanta-area attorney Marcus Thorpe has experienced some of the problems federal officials are trying to fix. He was in the program for more than 11 years before leaving last year to work in private practice. He previously worked as a prosecutor in Clayton, Fulton and Henry counties. Thorpe, 41, said he had about three years of payments that didn’t count because he wasn’t advised which loan program to enroll in for his payments to be properly applied toward his debt. He currently owes about $72,000 and believes he can repay the loans faster without being in the program.
Like others, Thorpe called the changes “great,” but believes they should all be permanent.
Georgia state Rep. Stacey Evans, D-Atlanta, the lead author of several bills filed earlier this year to address student loan debt, praised the changes, and would like to see more come soon.
“I hope this is the start of additional actions from the federal government to make sure that anyone who has the desire to seek higher education isn’t stopped at the campus gate because they can’t afford it,” she said. “Access to education is access to a better life.”
Temporary student loan relief
Some of the changes announced Wednesday concerning the federal Public Service Loan Forgiveness program:
- 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.
- A limited waiver will allow all payments by student borrowers to count toward the program, regardless of loan program or payment plan.
- The department will automatically provide credit for military service members and federal employees using federal data matches.
- Past-due payments and payments that were disqualified for differing slightly will be counted.