US President Joe Biden speaks in the Roosevelt Room of the White House in Washington, DC, on March ... [+]
The Department of Education indicates that nearly 400,000 borrowers are on track to receive student loan forgiveness within two years. And starting this week, President Joe Biden will be sending out emails to these borrowers, notifying them of their progress.
Following a wave of student loan forgiveness approvals, “380,000 borrowers who are within two years, or 24 qualifying payments, of receiving forgiveness under PSLF will also receive an email from President Biden starting next week thanking them for their service and notifying them that if they continue in their public service work, they will be eligible for forgiveness within that time frame,” said the Education Department in a statement last week.
Will you qualify for student loan forgiveness? Here’s what borrowers should know.
Student Loan Forgiveness Emails Follow Latest Batch Of PSLF Approvals
The Education Department’s announcement was made in conjunction with the Biden administration’s latest wave of student loan forgiveness under the PSLF program.
Public Service Loan Forgiveness can eliminate a borrower’s federal student loan debt after making 120 “qualifying payments,” the equivalent of 10 years, while working as an employee of certain nonprofit or public organizations. But PSLF was riddled with problems for years, resulting in many nurses, teachers, first responders, and other nonprofit and public sector workers getting rejected from the program. President Biden initiated a series of fixes and improvements since 2021, which dramatically increased the number of borrowers getting approved for student loan forgiveness.
Last week, the Biden administration announced that almost 80,000 borrowers had been approved for more than $5 billion in loan forgiveness through these PSLF improvements. This brings the total amount of loan forgiveness under PSLF to $62.5 billion, with more than 870,000 borrowers receiving student loan forgiveness through the program since October 2021. Prior to that, less than 10,000 borrowers had received any PSLF relief between 2007 (when the program was created) and 2021.
Biden Urges Borrowers To Remain On Track For Student Loan Forgiveness
This week, borrowers on track for PSLF will start receiving emails from President Biden, urging them to stay the course. Nearly 400,000 borrowers are within two years of receiving student loan forgiveness under the PSLF program, according to the Education Department.
“The Public Service Loan Forgiveness Program is an important way to bring more Americans into public service and help them get out from under the burden of student loan debt,” says Biden in the email. “But for too long, the program failed to live up to its commitments – and public service workers like you never got the relief you are entitled to under the law because of errors and administrative failures. I vowed to fix that, and I’m proud that my Administration has delivered on that promise.”
PSLF is effectively an all-or-nothing program under current law. That means that borrowers do not receive partial student loan forgiveness for partial completion of the program’s requirements. In order to qualify for loan forgiveness, borrowers must make the full 120 qualifying payments while working for an eligible employer.
“I hope you continue the important work of serving your community,” says Biden in the email. “And if you do, in less than two years you could get your remaining student loans forgiven through Public Service Loan Forgiveness.”
What Borrowers Should Know About Student Loan Forgiveness Through PSLF
To qualify for loan forgiveness via the PSLF program, borrowers must make the equivalent of 120 qualifying payments, which are payments made on Direct federal student loans under eligible repayment plans — either the 10-year Standard plan or one of several Income-Driven Repayment plans. Borrowers must also work in qualifying employment while making those payments. Qualifying employment is defined as 30 hours per week or more as a W-2 employee for eligible nonprofit or public entities.
Borrowers can check to see if their employment qualifies by using the Department of Education’s PSLF Employer Search Tool. To get past payments counted toward loan forgiveness, borrowers must certify their employment via the PSLF Help Tool.
A temporary Biden administration opportunity called the IDR Account Adjustment can allow borrowers to receive retroactive PSLF credit for past periods that normally wouldn’t count under the program’s rules. The account adjustment is one of the “fixes” that President Biden referenced in his recent communication to borrowers.
Under the account adjustment, any past period of repayment on any federal student loan can potentially count toward PSLF as far back as October 2007, as long as the borrower was working in qualifying public service employment at the time. Certain past periods of deferment and forbearance can count, as well. But the account adjustment is temporary, and some borrowers who need to take action (such as consolidating their loans through the Direct loan program) must do so before the end of April.
