The Biden Administration Announces $6 Billion loan for Student as a Forgiveness



Last week, the Biden administration announced that 100,000 borrowers had been identified and will be eligible to receive $6.2 billion in student loan forgiveness. This is the latest relief offered by the administration to struggling borrowers.

The program has strict eligibility criteria, so the preliminarily approved loan forgiveness was not final. These are the people who may qualify.

Public Service Loan Forgiveness and the Limited Waiver

The announcement made by the administration last week was about the Public Service Loan Forgiveness Program (PSLF). PSLF was established for the first time in 2007. This federal loan forgiveness program allows borrowers to get rid their loans after they make 120 qualifying payments over the course of ten years.

The original PSLF eligibility rules that defined “qualifying payments” were confusing to some borrowers. These problems were exacerbated by poor communication from loan servicers, and poor oversight of the Department of Education. The original rules required that a qualifying PSLF payments be made.

  • A federal direct student loan. You are not eligible for federal loans other than the FFEL-program loans and federal Perkins loans.

  • A income-driven repayment plan or the 10-year Standard repayment programme. Other plans, such as the Extended or Graduated repayment plans, did not count.

  • You can work as a full-time employee in a qualified public or nonprofit organization. Part-time work can be counted as long as there are at least two qualified employers in public service and that they work at least 30 hours per semaine.

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Due to the PSLF’s issues, approval rates have been low for this program for many years. In October, the Biden administration created the “Limited PSLF Waiver” program. It is also known by the “waiver”, or “waiver”. Under the waiver, two PSLF rules were temporarily modified by the Education Department:

  • Borrower can use past repayments to “convert” non Direct loans into Direct loans if they consolidate FFEL loans and Perkins loans through the federal Direct consolidation loan program.

  • The waiver, regardless of how long the repayment period was. You can still apply for PSLF regardless if the payments were timely or in full.

Some Borrowers may be eligible for automatic student loan forgiveness under PSLF Waiver

The Education Department says that many borrowers may be eligible for automatic student loan forgiveness and updated counts on qualifying PSLF payments through the waiver. If borrowers have already combined their non Direct federal loans into Direct consolidation loans, and filled out the required forms to certify that they are in public service employment, this is possible. Federal Student Aid staff will review borrower accounts and update PSLF payments in accordance with the PSLF Waiver rules. This will likely be true for most of the 100,000 borrowers eligible for late-wave student loan forgiveness.

Other Borrowers will have to make steps to be eligible for student loan forgiveness under PSLF Waiver

The waiver does not automatically grant student loan forgiveness. Perkins and FFEL loan borrowers who are still eligible for waiver must consolidate their loans via the federal Direct consolidation loan program. Borrowers who have not yet completed the PSLF Employment Certification forms in order to verify their employment will be required to do so.

The PSLF waiver will end on October 31st. Borrowers who must complete specific steps within a given time limit are restricted in their options. The Education Department has created a website to provide detailed information about who is eligible and how to apply. Officials believe that many more borrowers may be eligible for loan forgiveness, or could get close to it.

Education Department Updates PSLF Waiver Guidance

Borrowers will need to consolidate federal loans via the federal Direct consolidation loan program in order to be eligible for the PSLF waiver. Recent updates to the guidance have been made by the Department of Education. This document explains how payments are counted.

The new guidance states that “Assuming your repayment history overlaps [with every loan], the consolidation credit will credit the maximum number of loans that were combined.” You will receive 100 qualifying loan payments on the Direct Consolidation Loan if you have 50 qualifying repayments on a Subsidised Stafford Loan and 100 on another Subsidised Loan. If your repayment history for each loan is different, the consolidation loan could be credited with more money. This could enable more borrowers to reach the loan forgiveness threshold.



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