According to the most recent Education Department figures, around 145,000 federal student loan borrowers have received $8.1 billion in relief as a result of improvements to a federal debt forgiveness program.
About $8.1 billion in debt relief has been issued since October when the Education Department implemented several reforms to the Public Service Loan Forgiveness program. The PSLF, or Public Service Loan Forgiveness, program was established in 2007 to assist employees of nonprofit and government organizations in having their student debts canceled after 10 years of payments (120 total payments).
Nearly 9 Million Student Loan Borrowers Will be Eligible
The overall acceptance rate among applicants has been low - according to a September 2021 story from The Washington Post, just one in every five of the 1.3 million debtors pursuing debt discharge under PSLF was on track to obtain relief by 2026.
In 2021, the United States The Department of Education announced a move that temporarily waives specified PSLF rules to provide borrowers credit toward debt cancellation regardless of federal loan type or payment plan enrollment. This waiver will now expire on October 31, 2022.
According to a recent estimate from the Student Borrower Protection Center, nearly nine million public sector workers are likely eligible for debt cancellation under the PSLF program but have yet to complete the necessary documentation. According to SBPC, the states with the most public servants with student loan debt are California, Texas, Florida, and New York, as per The Hill.
The present payment suspension is scheduled to last until the end of August, as President Joe Biden imposed. Former President Donald Trump imposed the suspension in March 2020, then Biden prolonged it to May 2022, extending it beyond the planned term.
Biden extended the CARES Act-enacted policy three times during his first year in office after Trump had already done so twice before leaving office. Leading Democrats are urging Biden to extend his term further, with Elizabeth Warren, Chuck Schumer, and James Clyburn signing a letter in support, according to Marca.
Student Loan Cancellation For Disabled Borrowers
The Department of Education issued a rule modification in August 2021 that allowed 323 million student loan borrowers with "total and permanent" disability to cancel more than $5.8 million in federal debts. Borrowers with certain disabilities will no longer have to request for relief; instead, they will be identified by data matching in the Social Security Administration, which will begin identifying these borrowers quarterly in September 2021.
If you feel you may be eligible for student debt forgiveness due to total disability, fill out the online disability application on the Social Security website. Borrowers of student loans who have been deceived or cheated by educational institutions may file "borrower defense claims" with the Department of Education. Borrowers may be entitled to partial or entire student loan cancellation if these institutions are determined to have violated state laws.
Throughout 2021 and 2022, the Department of Education has established particular relief measures for student loan debtors who attended colleges and universities that made false representations about their institutions or deceived students when applying for loans. Among the student loan discharges are:
- ITT Technical Institute: 115,000 debtors received loan cancellations totaling $1.1 billion in August 2021.
- DeVry University: In February, 16,000 debtors got $415 million in loan discharges, as well as extra forgiveness for students at Westwood College, ITT's nursing school, and criminal justice programs at Minnesota School of Business and Globe University.
- Marinello Schools of Beauty: In April, 28,000 debtors had $238 million in debts canceled due to "pervasive and widespread misbehavior" at Marinello schools.
- Corinthian Colleges: On June 1, the Department of Education announced the largest defense claim discharge of the year, $5.8 billion in forgiveness for 560,000 debtors.
To gain relief, if you attended one of these colleges and owe money on a student loan, you must make an official borrower defense claim on the Federal Student Aid website. The DoE claims that once you finish your application, which should take approximately 30 minutes, they will contact you through email with details regarding your debt discharge, CNET reported.
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