The Oklahoman

Troubled program for student loan forgivenes­s getting another overhaul

- Collin Binkley

The Education Department said Wednesday it will drop some of the toughest requiremen­ts around Public Service Loan Forgivenes­s, a program that was launched in 2007 to steer more college graduates into public service but, since then, has helped just 5,500 borrowers get loans erased.

Congress created the program as a reward for college students who go into public service. As long as they made 10 years of payments on their federal student loans, the program promised to erase the remainder.

But more than 90% of applicants have been rejected. After making a decade of payments, many borrowers have found that they have the wrong type of federal loan or repayment plan to be eligible for the program. Thousands have ended up stuck with debt they thought would be cleared.

Under the temporary changes, those borrowers will now be eligible to get their loans erased.

Through October 2022, borrowers who have worked 10 years in a qualifying job will be eligible for loan relief no matter what kind of federal loan or repayment plan they have. Past loan payments that were previously ineligible will now count, moving some borrowers closer to the finish line.

The change will immediatel­y make 22,000 borrowers eligible to get loans canceled, and another 27,000 could become eligible if they get previous payments certified, according to the department. In total, more than 550,000 borrowers will be moved closer to forgivenes­s, the agency said.

“Borrowers who devote a decade of their lives to public service should be able to rely on the promise of Public Service Loan Forgivenes­s,” Education Secretary Miguel Cardona said. “The system has not delivered on that promise to date, but that is about to change for many borrowers.”

It’s a particular boon for borrowers with Federal Family Education Loans, from a defunct loan program that issued federally backed loans through banks. Loans in that program, which ended in 2010, were previously ineligible but can now be canceled through the updated rules.

Among other changes, the department will allow military members to count time on active duty toward the 10 years, even if they put a pause on making their payments during that time.

Starting next year, the department will automatica­lly count payments by federal workers and military members toward the required 10 years. Under existing rules, applicants have to apply to get their payments certified.

The changes are seen as a short-term fix while the agency considers permanent improvemen­ts through a federal rulemaking process. The department started holding hearings this week as part of a process that could bring sweeping change to federal student aid programs, including the public service benefit.

Advocacy groups praised the temporary changes. Aaron Ament, president of the legal group Student Defense, which has represente­d students in lawsuits over the program, called it a “huge step in the right direction.”

Randi Weingarten, president of the American Federation of Teachers, said the change is welcome.

“Today we breathe a collective sigh of relief as the Kafkaesque system that dashed the dreams of far too many finally starts to be dismantled,” she said.

The program has been a source of bipartisan scorn; Democrats and Republican­s have agreed that the program is flawed and needs to be updated. But Republican­s said the Education Department is oversteppi­ng its authority by moving to alter a program that Congress created.

Rep. Virginia Foxx, R-N.C., the top Republican on the House education committee, said President Joe Biden’s administra­tion is “circumvent­ing Congress through executive action.”

“We agree this program is in desperate need of reform; however, such reforms require Congressio­nal action, and we encourage you to work with us to fix the federal loan and repayment program,” Foxx said in a letter to Cardona.

It marks the latest of several attempts to fix the program.

 ?? GREG NASH/AP FILE ?? Education Secretary Miguel Cardona said borrowers who devote a decade of their lives to public service should be able to rely the promise.
GREG NASH/AP FILE Education Secretary Miguel Cardona said borrowers who devote a decade of their lives to public service should be able to rely the promise.

Newspapers in English

Newspapers from United States