All articles tagged with #public service loan forgiveness
Two federal judges struck down the Education Department rule aimed at narrowing Public Service Loan Forgiveness eligibility, calling it unlawful, arbitrary, and in some readings potentially violating the First Amendment; the policy would have barred employers with a 'substantial illegal purpose' (including supporting terrorism or trafficking children) from PSLF and was set to take effect the next day amid lawsuits from nonprofit groups.
A federal judge in Massachusetts (U.S. District Judge Myong J. Joun) struck down the Trump administration’s revised Public Service Loan Forgiveness eligibility rules, ruling they unlawfully allowed disqualification of employers for DEI or other policy positions not enacted into law, and the decision came just before the PSLF rule was to take effect.
A coalition of Democrats led by Sen. Warren is pressing the Education Department to cancel debt for borrowers eligible under existing relief programs (including PSLF, disability discharges, and borrower defense), clear the backlog of income-driven repayment applications, and extend the pause on involuntary collections, while blocking the transfer of defaulted loans to the Treasury. They warn Trump-era changes set to take effect July 1—eliminating the SAVE plan and raising payments—could push more borrowers into default as millions are already in default or delinquent, risking reduced access to credit.
Nearly two dozen attorneys general sued the Education Department over a new rule that limits eligibility for the Public Service Loan Forgiveness Program by deeming certain activities 'substantially illegal,' arguing it violates the law and politicizes student loan forgiveness, while the Department defends it as a measure against organizations involved in illegal activities.
Cities and unions are suing the Trump administration over a new rule that could deny loan forgiveness to public workers based on their employer's activities, with concerns it may be used to target organizations or jurisdictions with policies opposing the administration's views. The rule defines 'substantial illegal purpose' broadly, potentially affecting workers in organizations involved in lawful activities related to immigration, LGBTQ+ rights, or racial justice, and raises questions about the scope of the Department of Education's authority. Critics argue the rule contradicts Congress's original intent for PSLF and could lead to staffing crises in public service sectors.
The Trump administration is offering student loan forgiveness and signing bonuses exclusively to new ICE agents, while proposing to limit or alter the Public Service Loan Forgiveness program for other public interest workers, raising concerns about political bias and the weaponization of financial aid systems.
The Biden administration plans to email nearly 380,000 borrowers confirming their eligibility for student loan cancellation within two years under the Public Service Loan Forgiveness program. The administration has cleared the education debts of nearly 4 million people since Biden's election, totaling $143.6 billion in relief. Borrowers can explore over 100 forgiveness programs and should keep track of their qualifying payments and required steps. The Education Department has been implementing positive changes to help borrowers get closer to forgiveness, and borrowers with multiple loans can apply for consolidation to receive credit going back to their first loan payment.
President Biden is waiving an additional $5.8 billion in student loans for 78,000 public service workers and plans to email 380,000 borrowers in the public sector to inform them of impending debt cancellation. This move has drawn criticism from Republicans, who accuse Biden of attempting to "buy votes" and claim that his loan forgiveness efforts have hindered the rollout of a new college financial aid form. Biden has been actively using executive tools to reach out to borrowers and has made reforms to the Public Service Loan Forgiveness program, expanding relief for millions of Americans.
President Joe Biden announced the cancellation of nearly $6 billion in student debt for 78,000 public service workers, including teachers, nurses, and firefighters, through the Public Service Loan Forgiveness program. This action is part of the Administration's efforts to address past administrative failures and provide relief to those entitled under the law. The announcement builds on previous progress in student debt relief, including significant increases in Pell Grants and improvements to Income-Driven Repayment plans. The Administration is also pursuing alternative paths to deliver student debt relief to as many borrowers as possible following a Supreme Court decision on the original relief plan. President Biden reaffirmed his commitment to using all available tools to provide student debt relief and ensure that higher education is a pathway to the middle class.
The Education Department has introduced a new option for student loan forgiveness called the "buyback" program, which allows borrowers in specific circumstances to count certain deferment and forbearance periods towards Public Service Loan Forgiveness (PSLF). While other temporary flexibilities are currently available, this new program will provide an additional pathway to student loan forgiveness for PSLF borrowers. The buyback program allows borrowers to pay the equivalent of what they would have paid under a qualifying repayment plan for PSLF during non-qualifying periods. However, there are specific rules and restrictions, and borrowers must have at least 120 months of qualifying employment to apply for a buyback. The process for requesting a buyback involves using the Education Department's PSLF Reconsideration portal and waiting for a response.
President Joe Biden has announced an additional $9 billion in student debt relief for 125,000 borrowers, bringing the total approved debt cancellation by his administration to $127 billion for nearly 3.6 million Americans. The new measures include debt relief for borrowers under Public Service Loan Forgiveness programs, fixes to "income-driven repayment" for eligible borrowers, and discharge for borrowers with disabilities. Biden emphasized the importance of this relief for individuals and the economy as a whole.
Six Democratic lawmakers, including Sen. Bob Menendez and Sen. Elizabeth Warren, have expressed concerns about student-loan borrowers being forced into repayment despite qualifying for debt relief. They sent a letter to the education secretary, Miguel Cardona, highlighting issues with the student-loan company MOHELA, including long wait times, problems with credit for qualifying payments, and delays in refunds. The lawmakers urged the Department of Education to address these issues before federal student-loan payments resume on October 1. They also requested information on tools to hold MOHELA accountable and data on call-hold times. MOHELA has previously faced scrutiny for processing delays, and borrowers in the Public Service Loan Forgiveness program rely on the company for proper administration of debt relief.
The Biden administration has already canceled a record $66 billion in student loan debt for nearly 2.2 million borrowers through changes to existing federal programs. These changes include making it easier to qualify for the Public Service Loan Forgiveness program, expanding eligibility for the borrower defense to repayment program, and providing automatic loan discharges for permanently disabled borrowers. Three individuals shared their stories of receiving debt relief, including one who attended a school that engaged in misleading practices, another who struggled with the complicated application process for the Public Service Loan Forgiveness program, and a radiologist who benefited from the consolidation of his loans and the temporary waiver put in place by the Biden administration.
Despite the Supreme Court's decision blocking President Biden's loan forgiveness program, there are still several ways to cancel student debt. These include income-driven repayment plans, public service loan forgiveness for government and nonprofit employees, cancellation for students of closed or low-performing schools, bankruptcy discharge (though it is challenging), disability discharge for those classified as disabled, and debt cancellation upon death. It is important for borrowers to explore all available options to alleviate their student loan burden.
The pandemic-era policy suspending federal student loan payments has been a big win for public servants pursuing the Public Service Loan Forgiveness program, allowing them to get closer to debt cancellation while not making any payments on their debt. Each month during the pause counts toward a borrower's timeline on PSLF, whether or not they made a payment. While borrowers pursuing PSLF will get credit for payments during the pause, they still need to be employed with the government or a qualifying nonprofit to be heading toward loan forgiveness. The fate of the Biden administration's sweeping student loan forgiveness is currently in the hands of the Supreme Court.