Do You Qualify For $5 Billion Of Student Loan Forgiveness?

Student loan borrowers got $5 billion student loan forgiveness. Here’s how to qualify.

Here’s what you need to know.

Student Loans

The U.S. Department of Education announced Thursday that 70,000 student loan borrowers got $5 billion of student loan forgiveness. In October, the Biden administration announced major changes to public service loan forgiveness. At the time, the Education Department announced that $2 billion of student loans would be cancelled within weeks. While 22,000 of student loan borrowers were expected to get student loan relief, new data shows that triple that amount got student loan forgiveness. Here’s how to qualify:

Public Service Loan Forgiveness: overview

Congress created the Public Service Loan Forgiveness in 2007, and President George W. Bush signed the legislation. The goal of the program was to help public servants get student loan cancellation in exchange for working in public service. However, despite its well-intended goals, nearly 99% of student loan borrowers who applied were rejected for student loan forgiveness. President Joe Biden and U.S. Secretary of Education Miguel Cardona have worked to simplify the program and make the rules easier for student loan borrowers to get student loan forgiveness. Biden mentioned public service loan forgiveness as one of 3 things to do during student loan relief.

Student loan forgiveness: how to qualify

To qualify for the Public Service Loan Forgiveness program, you must meet at least the following requirements:

• You must work full-time (at least 30 hours a week) for a qualified public service or non-profit employer;
• You must be enrolled in an income-driven repayment plan such as IBR, PAYE, REPAYE or ICR;
• You must make at least a majority of your student loan payments while enrolled in an income-driven repayment plan; and
• You must make 120 monthly payments on your student loans.

If you meet these and other requirements, your remaining student loan balance can be cancelled.

How to get a student loan forgiveness limited waiver

After student loan borrowers were rejected for student loan forgiveness based on various technicalities, the Biden administration decided to relax the rules to get public service loan forgiveness for a limited time period. (Student loan borrowers will get $15 billion of student loan cancellation).

For example, between now and October 31, 2022, you can complete a limited waiver to qualify previous student loan payments that were initially not counted toward the 120 monthly student loan payment requirement. (Here’s how to get approved for studeent loan forgiveness even when you were already rejected). This may include:

• student loan payments for FFELP Loans and Perkins Loans;
• student loan payments made before student loan consolidation;
• student loan payments made under the wrong student loan repayment plan;
• student loan payments that were late or or with the wrong payment amount; and
• student loan payments for active military service

If you are pursuing public service loan forgiveness, and you had prior payments rejected for one of these reasons, make sure you complete a limited waiver to have these student loan payments count toward the 120 monthly student loan payments. (Here’s how to get student loan forgiveness).

Student loan forgiveness: Q&A

Here are some helpful questions on how to qualify for student loan forgiveness:

Which student loans qualify?

Public service loan forgiveness is only available for federal student loans. Therefore, private student loans don’t qualify for student loan forgiveness. (Here’s who won’t get student loan forgiveness).

Do you have to consolidate your student loans?

Public service loan forgiveness is for Direct Loans. If you have FFELP Loans or Perkins Loans, you can consolidate these student loans into a Direct Consolidation Loan. That said, if you made prior FFELP or Perkins Loans student loan payments, you can submit a limited waiver to have these prior student loan payments count.

Does my employer qualify for public service loan forgiveness?

Remember, “public service” or “non-profit” is about your employer, not the work you perform. To ensure that your employer qualifies, submit an Employer Certification Form to the U.S. Department of Education every year and whenever you change employers.

Which income-driven repayment plan should you choose?

Choose the income-driven repayment plan that is most helpful for your unique financial and personal situation. For example, focus on the income-driven repayment plan — IBR, PAYE, REPAYE or ICR — that minimizes your student loan payment and maximizes student loan forgiveness.

Can you still get student loan forgiveness?

The Public Service Loan Forgiveness program is an active program. If you’re currently not pursuing public service loan forgiveness, you can still enroll and start working toward student loan forgiveness.

Student loan relief, which student loan borrowers have had for nearly two years, will end soon. Be prepared for the restart of student loan payments. You have many options for student loan repayment. Here are some popular ways to pay off student loans faster:

• Student loan refinancing (lower interest rate + lower payment)
• Income-driven repayment plans (lower payment)
• Public service loan forgiveness (student loan forgiveness)

Student Loans: Related Reading

Is student debt cancellation next?

Here’s who won’t get student loan forgiveness

Student loan borrowers will get $15 billion of student loan cancellation

How your student loans can qualify for $1.7 billion of student loan forgiveness