Exclusive: Nearly 610,000 public sector workers got student loan forgiveness after Biden loosened the rules

By Katie Lobosco, CNN

Nearly 610,000 student loan borrowers have received debt relief from the Public Service Loan Forgiveness program since October 2021, when the Biden administration temporarily expanded eligibility.

The program promises to wipe away remaining federal student loan debt after an eligible government or nonprofit worker makes 10 years of monthly payments.

Another 6,000 borrowers in the program will see their loans discharged soon. Altogether, those cancellations will total $42 billion of federal student debt, the Department of Education said Monday.

Just 7,000 borrowers had been approved for relief under the Public Service Loan Forgiveness program during the Trump administration, according to the department.

The targeted debt relief program was created in 2007 but was riddled with problems, and a very small percentage of people who applied had received forgiveness before 2021, prompting the Biden administration to make changes.

“Since Day One, the Biden-Harris Administration has worked relentlessly to fix a broken student loan system, including by making sure we fulfill the promise of Public Service Loan Forgiveness for those who have spent a decade or more serving our communities and our country,” Secretary of Education Miguel Cardona said in a statement.

“The difference that Public Service Loan Forgiveness is making in the lives of hundreds of thousands of Americans reminds us why we must continue doing everything we can to fight for borrowers and why families cannot afford to have progress derailed by partisan politicians,” he said.

The administration’s separate, one-time student loan forgiveness program is currently held up in court after several Republican-led states sued, arguing the executive branch does not have the power to implement the proposed debt relief.

How Biden expanded the PSLF program

In October 2021, the Biden administration created a one-year waiver that expanded eligibility for the PSLF program.

Previously, eligibility hinged on having a federal Direct Loan and being enrolled in an income-driven repayment plan, which sets payments based on income and family size. Those with Federal Family Education Loans, which were made by private lenders but backed by the government, did not qualify.

But under the temporary waiver, it no longer mattered what kind of federal student loans borrowers have or what repayment plans they were enrolled in. All payments were eligible for the Public Service Loan Forgiveness program if the borrower was working full time for a qualifying employer.

The waiver ended after October 2022, though some applications filed under the waiver are still being processed.

An updated tool for PSLF borrowers

The department is making some other changes to the PSLF program to make it easier for borrowers to apply.

The newly updated PSLF Help Tool now allows borrowers to sign and submit their PSLF form digitally and track its status throughout the process, the Department of Education said Monday.

Previously, borrowers had to take multiple steps to submit their PSLF form. In most cases, they had to print and sign their form, obtain signatures on the printed form from one or more employers, and then submit the completed form and related documents — sometimes by mail or fax.

Now, borrowers can complete the entire process digitally on StudentAid.gov via the PSLF Help Tool, including requesting an e-signature from employers.

“The improved PSLF Help Tool is another step forward to modernize and simplify the process for people who rely on us to carry out the law effectively,” Federal Student Aid Chief Operating Officer Richard Cordray said in a statement.

More permanent changes to PSLF are coming

The Biden administration is making some permanent changes to the PSLF program, which are set to take effect in July.

The changes will allow borrowers to receive credit toward PSLF on payments that are made late, in installments or in a lump sum. Prior rules only counted a payment as eligible if it was made in full within 15 days of its due date.

Under the new rules, time spent in certain periods of deferment or forbearance will count toward PSLF. These periods include deferments for cancer treatment, military service, economic hardship and time served in AmeriCorps and the National Guard.

The new rules will also simplify the criteria to meet the requirement that a borrower be a full-time employee in a public sector job. The new standard will consider full-time employment at 30 hours a week. In particular, the change will help adjunct faculty at public colleges qualify for the program.

Under the revised regulations, borrowers will receive some credit for past payments when they consolidate older loans into federal Direct Loans in order to qualify for the program. Previously, borrowers lost all progress toward forgiveness when they consolidated. After July, they will receive a weighted average of existing qualifying payments toward PSLF.

Biden’s other student loan forgiveness efforts

President Joe Biden’s separate, one-time student debt forgiveness program, which promises up to $20,000 of debt relief for some low- and middle-income borrowers, is currently blocked by federal courts.

The Supreme Court is expected to issue its decision in the case over whether the program is constitutional in late June or early July.

But the Biden administration has also streamlined student debt relief for people who were defrauded by for-profit colleges as well as borrowers who are permanently disabled.

In total, the administration has approved more than $66 billion in loan relief to nearly 2.2 million borrowers to date, according to the Department of Education.

Meanwhile, payments on most federal student loans have been paused since March 2020 due to a pandemic-related relief effort. That pause is expected to end later this year.

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