134 Groups Urge Biden To Extend Expiring Student Loan Forgiveness Initiatives, While Top Officials Tell Borrowers To Apply Now
A coalition of more than 130 organizations wrote to President Biden on Thursday urging him to extend temporary student loan forgiveness initiatives and the student loan pause that are set to end in weeks.
Here is the latest.
Forgiveness of student loans thanks to the expansion of PSLF and IDR
The Biden administration passed two major student loan forgiveness initiatives in the past year:
- PSLF’s limited waiver expands eligibility for the Troubled Public Service Loan Forgiveness (PSLF) Program, which provides federal student loan forgiveness if a borrower works for 10 years or more for nonprofit organizations or public. Under the waiver, the Department of Education can retroactively count prior loan periods to the PSLF that would have been previously disallowed, including prior payments, regardless of federal loan type, repayment plan, or whether payment has been made in full or on time.
- The IDR adjustment expands eligibility for student loan forgiveness under income-contingent repayment (IDR) plans, allowing federal student loan forgiveness after 20 or 25 years of repayment under plans linked to the borrower’s income. As part of the IDR adjustment, the Department of Education may retroactively count past repayment periods (regardless of federal loan type or specific plan), as well as certain past periods of deferment and forbearance, towards the cancellation term of a borrower’s 20 or 25 year IDR loan. The IDR adjustment also feeds into the limited PSLF waiver by allowing certain past deferment and forbearance periods to also count towards the PSLF.
But both initiatives are temporary. The limited PSLF waiver is due to end on October 31, 2022. The IDR adjustment does not have a specific end date, but the Ministry of Education has suggested that it will only be available until the end of the year. Some borrowers — especially borrowers with older federal student loans from the FFEL program — may need to consolidate those loans through the Direct Consolidation Program to qualify for either initiative. Since this process can take one to three months, borrowers quickly run out of time to qualify.
Groups urge Biden to expand student loan forgiveness initiatives
In their letter, the coalition of civil rights, consumer protection and labor organizations urged President Biden to extend relief, given that millions of borrowers may not even be aware that these opportunities student loan forgiveness are available.
“To ensure that your administration’s policies have the intended effect, we urge you to extend the PSLF waiver deadline until at least 2023 and calibrate the IDR adjustment schedule accordingly,” he said. writes the coalition. The groups also urged Biden to further expand the programs by allowing “the entire time since [borrowers] first repayment entered” to automatically count towards canceling the student loan.
Although the Department of Education has reported that more than $8 billion in student loan forgiveness has been approved under these initiatives, borrower advocates fear billions more could be left on the table. programs expire, as many borrowers may still not be aware of their existence. A analysis published by the Student Borrower Protection Center (SBPC), an advocacy group for student borrowers, suggests there may be as many as 9 million borrowers working in the public service who may be eligible for relief under the Limited PSLF waiver, but Ministry of Education Data To display that just over a million of these borrowers initiated PSLF applications.
The Biden administration has not indicated that an extension of the programs is being considered. Instead, senior Education Ministry officials urged borrowers to apply for student loan forgiveness before deadlines.
“By October 31, a limited PSLF waiver temporarily modifies the rules of the program” for PSLF, Education Undersecretary James Kvaal said in a mass email to 22 million loan borrowers. direct earlier in July. “Spread the word to your colleagues, friends and family who work in the public service…Tell them to act before October 31!”
Groups also urge Biden to extend student loan hiatus
The limited PSLF relief and IDR adjustment aren’t the only temporary student loan relief initiatives expiring in the coming months. The ongoing student loan pause, which has halted all payments and interest on federal government-held student loans since March 2020, is also set to end on August 31, a few weeks from now.
In its letter to President Biden, the coalition urged him to extend the student loan pause as well, tying that relief to the expiring relief provided by the limited PSLF waiver and the IDR adjustment. “We urge you to … extend the payment pause until a date after which waiver and adjustment loan cancellations will be processed, to reduce confusion and ensure that borrowers whose loans will be canceled do not do not resume reimbursement unnecessarily.”
The Biden administration has suggested another extension of the student loan pause is possible. But officials haven’t made any final decisions despite the looming August deadline, leaving borrowers looking for clear information and advice as time goes by.
The coalition urged the Biden administration to be decisive and clear to borrowers. “Government must provide clear information to borrowers and the public…so that borrowers and those who work with them fully understand their options and can make informed decisions about how to manage their loans.”
Further Reading on Student Loans
5 things student borrowers should do right now
The Biden administration approved $26 billion in student loan forgiveness, but borrowers face growing uncertainty
3 Key Student Loan Forgiveness Opportunities Could End Soon – Here’s How to Apply
If You’ve Been To These Schools, You May Qualify For Student Loan Forgiveness: Here’s What To Do