You Might Finally Qualify for Student Loan Forgiveness

For years, the Public Service Loan Forgiveness (PSLF) program has struggled to actually forgive student loan debt. But yesterday, the Biden administration announced changes that will immediately erase student loan debt for roughly 22,000 borrowers—and will help hundreds of thousands more reach loan forgiveness sooner than expected. Here’s how the changes might affect your student loans.

Eased requirements for the PSLF program

In 2007, Congress created the federal student loan forgiveness program to encourage people to work in federal and local governments, public schools, and the military. In exchange for about 10 years of full-time service (or 120 student loan payments), the program forgives the remaining balance on federal loans—or at least, that’s how it’s supposed to work. However, according to a 2019 Government Accountability Office (GAO) report, this happens rarely, as it found only 1% of applicants were deemed eligible for student loan forgiveness.

Part of the problem is that the program has only been available to borrowers who have Direct Loans, a specific type of student loan managed by the federal government. One option has been to consolidate existing student loans into a Direct Loan, but that just set back borrowers even further, as previous payments for other loans don’t count towards the 120 payments needed to forgive the outstanding balance.

To that end, the Education Department is now offering a limited waiver that “allows all payments by student borrowers to count toward PSLF, regardless of loan program or payment plan.” All borrowers who currently have FFEL, Perkins, or other non-Direct Loans, can get this benefit of this limited waiver if they apply to consolidate into the Direct Loan program and submit a PSLF form by Oct. 31, 2022. Additionally, members of the military will be able to count deferment and forbearance while on active duty toward the loan forgiveness. The Education Department estimates this will help 550,000 student loan borrowers reach loan forgiveness sooner than expected.

How to apply for the PSLF waiver

The Education Department says it will be contacting borrowers and encouraging them to consolidate their loans or apply for the program by Oct. 31, 2022. To apply for the waiver, start by visiting StudentAid.gov/PSLFWaiver.