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Here’s How It Could Get Easier to Qualify for Public Service Loan Forgiveness

The Biden administration earlier this month announced a wholesale reform of a web of federal loan forgiveness, including a number of measures to make it easier for federal workers to make use of the historically headache-inducing programs.

The Biden administration plan to reform a popular, yet frustrating, program aimed at courting young people to enter the federal government and other public service jobs could soon become less of a headache for borrowers.

Earlier this month, the Education Department proposed 750 pages of regulations aimed at simplifying several federal loan forgiveness programs and making them easier to qualify for. A significant portion of those proposed rules are dedicated to making a trove of temporary fixes for the Public Service Loan Forgiveness program, which eliminates debt for borrowers who have made 10 years of regular payments while working for a qualifying government or nonprofit organization, permanent.

Last October, the Education Department issued several waivers and other temporary changes to the Public Service Loan Forgiveness Program to make it easier for borrowers to qualify. Those tweaks included giving participants a chance to consolidate their loans into the correct Direct Loan program, providing waivers for payments that were calculated incorrectly or were slightly late, as well as offering to review previously denied applications.

Government Executive readers recently shared their experiences and the headaches they endured in their at times herculean efforts to comply with the terms of the Public Service Loan Forgiveness program over the course of a decade to eventually have their student debt erased.

Although many of the provisions of the current temporary waivers, which run until Oct. 31, 2022, are aimed at helping borrowers who were tripped up by an element of the program’s requirements over the last decade, the proposed regulations seek to make it easier for borrowers to comply moving forward.

The Education Department said the regulations remove “overly stringent” requirements that payments must be paid in full within 15 days of being due, and allowing for lump sum and partial payments to count toward forgiveness. But the waiver related to Federal Family Education Loans, allowing borrowers to consolidate their debt into direct loans, could not be made permanent, due to statutory restrictions. In order to make those waivers permanent, Congress must act.

The new regulations also seek to simplify a number of definitions involved in determining who qualifies for public service loan forgiveness. For instance, full time employment would be defined simply as “at least 30 hours a week,” and clarifying the definition of what kinds of employers qualify as public service.

Additionally, the regulations allow for the Education Department to automate parts of the progress, so that borrowers at certain qualifying employers, like the federal government, don’t need to apply for forgiveness at the end of their decade of service. And the proposed rules would create a permanent process for borrowers who had previously been denied forgiveness to appeal that decision and have their cases reconsidered.

The regulations also clean up the program’s rules around service-related deferments and forbearance—periods when due to the type of service the borrower is engaged in, they are allowed not to make student loan payments—to ensure those periods account toward their 10 years of service and repayment. The regulations state that deferments related to cancer treatment, Peace Corps service, economic hardship, military and National Guard service, AmeriCorps, as well as Defense Department and other administrative forbearances, all count toward completion of the program.

The regulations would also provide borrowers with a “hold-harmless” option to serve as a catch-all for other types of deferments and forbearances.

The Education Department plans to finalize the rules by Nov. 1 so that they can take effect by July 2023.