Student loan forgiveness: Who is eligible and how to apply under Biden’s new relief program

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A federal program failed to deliver on its promise to provide student loan relief to thousands of public employees, including teachers, police officers and firefighters. Now the government is trying to fix it.

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US Department of Education on Wednesday Major changes announced After thousands of borrowers applied for forgiveness for its Public Service Loan Forgiveness program, nearly all of them were rejected by the federal government.

After a decade of making payments, many found that they had the wrong type of federal loan or repayment plan in order to be eligible for the program. Thousands are in debt which they thought would be wiped out.

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Under the temporary changes till October 2022, those borrowers will be eligible to get their loans approved.

The overhaul is also designed to help borrowers correct errors and calculate payments they were trying to make toward the program. The government said it is expected to reduce the time more than 550,000 borrowers – who have already consolidated their loans – need to make payments so they can qualify for forgiveness.

The agency said the changes would immediately wipe out the debt of 22,000 borrowers by $1.7 billion. The government estimates that about $2.8 billion in debt could be forgiven to another 27,000 borrowers if they proved they were employed in a qualified job.

If you have these loans, here are the steps you can take to get relief:

What is Public Service Loan Forgiveness? How did it originate?

Public Service Loan Forgiveness is a program that was launched in 2007 in an effort to drive more college graduates into public service. By the time he made 10 years’ worth of payments on his federal student loans, the program promised to wipe out the remainder.

However, the program has proven to be anything but forgiving. Prior to Wednesday’s announcement, only 16,000 borrowers had their loans forgiven through the program, according to the Education Department. Around 13 lakh people are trying to discharge their debts through this program.

One of the most problematic pieces of public service loan forgiveness: Many borrowers had the wrong type of loan and didn’t realize they weren’t eligible for relief.

When the loan forgiveness program was first introduced, many loans offered from the federal government were family federal education loans (FFELs), or loans made through private entities but insured by the federal government.

The government stopped offering those loans in 2010 and is now relying on direct loans – which are worthy of forgiveness. The Department of Education said that about 60% of borrowers with approved employers hold FFEL loans.

Who is eligible for student loan forgiveness?

The government previously limited eligibility for the Public Service Loan Forgiveness Program to only certain types of federal student loans and specific repayment plans.

However, as of October 2022, borrowers who have paid 10 years while in a qualifying job— such as positions in federal, state or local governments, a non-profit organization or the U.S. military — will now be eligible for debt relief, no matter what type of federal loan or repayment plan they have.

Past loan payments that were previously ineligible will now be counted, moving some borrowers closer to forgiveness. It is specifically expected to help those borrowers with federal family education loans.

Among other changes, the department will allow military members on active duty to count the period of 10 years, even if they hold off on making their payments during that time.

How can I find out whether my previous or current employer is eligible for PSLF?

Use this help tool from the Federal Student Aid website to check if you work for an eligible employer: https://studentaid.gov/pslf/

It provides information on which employers meet the requirements for the Public Service Loan Forgiveness Program.

How Do I Check What Federal Loans I Have?

If borrowers are unsure about what type of loan they have, they can request that information from their loan servicer or they can check the federal government’s website for financial aid, the Student Loan Advisory Institute. According to President Betsy Mayotte.

If you don’t know what type of federal loan you have, you can view which loans by logging into your account. student aid.gov, I am going my help page And scroll down to the Loan Analysis section.

If I am eligible, what are the steps I need to take?

Changes in the loan waiver program will happen in two parts.

The agency will earlier relax some of the rules that had prevented eligible borrowers from discharging their loans through a limited exemption. For example, the government would allow a person to calculate the total number of payments required to be forgiven on any loan.

The Public Service Loan Forgiveness waiver will be available to borrowers who have direct loans, federal family education loans and Perkins loans.

Parents are not eligible under PLUS Loan limited discount.

The department said it will automatically credit borrowers who already have direct loans and have proven that they operate in an eligible sector. Others who haven’t enrolled in the program or have ineligible federal loans must apply for forgiveness, which may require them to consolidate their loans. Borrowers will have until October 2022 to apply.

To learn more about debt consolidation, see StudentAid.gov/Manage-Loans/Consolation.

The Department of Education also plans to review all public service loan forgiveness applications that were denied and to give federal employees automatic credit for forgiveness.

Other changes will come more slowly through rules created by a lengthy and complex bureaucratic “rule-making” between the government and other stakeholders.

visit for more information StudentAid.gov/PSLFWaiver.

How do you get credit for past payments under the new rules?

For a limited time, borrowers can get credit for past payments made on loans that would not otherwise qualify for the Public Service Loan Forgiveness Program.

There are two requirements to receive additional qualifying payments: full-time employment and debt consolidation.

For example, according to Federal Student Aid, you must have worked full-time for a qualified employer when prepayment was made.

Some part-time workers may qualify under certain circumstances. Assume you were employed in more than one qualifying part-time job at the same time. You will be considered full-time if you work a combined average of at least 30 hours per week.

According to Federal Student Aid, it can take several months for a borrower’s account information to reflect the new payment calculation.

How far can I get credit for payments?

To be sure, you can only get credit for payments made after October 1, 2007, when the Public Service Loan Forgiveness Program began.

For any period you may receive additional qualifying payments, you must file a application.

Who may need to consolidate their loans?

If you have federal Family Education Loan Program loans, federal Perkins loans or other types of federal student loans that are not direct loans, you must consolidate them into the Direct Loan Program by October 31, 2022, according to Federal Student Aid.

This is important for borrowers because if you consolidate after that date you may not receive credit for the payment. Once the consolidation process is completed, you will have to submit a PSLF Form to your loan servicer.

The Help tool on the Federal Student Aid website will be updated in the coming months to process applications for borrowers and people with Perkins Loans in the Federal Family Education Loan Program.

Federal Student Aid said on its website that right now, employment can be verified for them in Phase 1 of the assistance tool, and debt consolidation can still be requested. But those borrowers applying for the Public Service Loan Forgiveness Program through the tool may not be available in the near term.

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