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The Public Service Student Loan Forgiveness Flood Gates Have Opened

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Recent changes to an embattled program designed to cancel student loan debt for federal employees and other people who work in public service appear to have made it more accessible, as the Education Department announced Wednesday that it has canceled $6.8 billion in student debt in recent months.

The Public Service Loan Forgiveness program was established in 2007 as a way to encourage young people to pursue careers in the government and nonprofit sectors. On paper, it offered to forgive someone’s student loan debt following 10 years of working in a “public service” job, provided they continued to make regular loan payments for the entirety of that time period.

But in practice, it was exceedingly difficult for applicants to use successfully before it was reformed. Questions around what jobs were eligible for loan forgiveness, as well as confusion over which types of loans can be forgiven—exacerbated by lenders’ faulty advertising on the topic—meant very few enrollees had successfully gotten their debt forgiven.

Last fall, the Education Department announced that it had established a temporary waiver, which runs until Oct. 31, to give borrowers a chance to consolidate their loans into the correct Direct Loan program. The department also said that the waiver would also apply to prior payments that previously had not qualified because they were miscalculated by a penny or considered late.

Other changes ensured that military service members would be credited for their time on active duty, even though their loans are technically considered in deferment for those periods, and the department vowed to cross reference data with information from agencies and the military service branches to automatically certify federal workers’ and military service members’ employment.

In an announcement this week, the Education Department said those changes have already borne fruit. Since the waiver program became active, more than 113,000 borrowers have been approved for loan forgiveness, totaling $6.8 billion for an average of around $60,000 of loan forgiveness per borrower. That compares to around 18,000 total borrowers who had loans forgiven from the start of the program through Oct. 31, 2021, for a total of about $1.4 billion. 

Additionally, the department recently launched a system for people who previously were denied access to the Public Service Loan Forgiveness program to request that their application be reconsidered. In order to file a reconsideration request, applicants need to provide their employer’s Employer Identification Number, the dates of loan payments that had been deemed out of compliance with the program’s rules, and digital versions of tax forms and letters from FedLoan.