The future of President Joe Biden’s widespread student loan forgiveness program may still be uncertain, but that’s not stopping his administration from implementing other measures to eliminate tens of billions of dollars in college debt.
More than 615,000 borrowers have had $42 billion total in student loan debt forgiven via temporary changes made to the Public Service Loan Forgiveness (PSLF) process since October 2021, the U.S. Department of Education announced Monday. That includes nearly 610,000 borrowers who have seen their debt already discharged.
The PSLF program was created to encourage people to take jobs in fields like education, health care, law enforcement, and nonprofit work. Those who have worked full-time in a qualifying public service job for at least 10 years and have made 120 on-time payments the entire time can apply for the remainder of their debt to be forgiven, tax-free.
But the program has long not lived up to borrower expectations: Though it’s existed for years, just 7,000 people had been approved for forgiveness before Biden took office, according to the Education Department. That’s due not only to the complicated nature of the application process, but also because of mishaps on part of the student loan servicer.
Under Biden, the Education Department has made a number of changes since then to make it easier to actually attain forgiveness, including offering a one-time waiver to retroactively broaden the types of loans and payments that are eligible for relief.
The waiver allowed qualifying borrowers to receive credit for all payments they made on their loans. This includes those who were enrolled in the wrong repayment track, or those who made late or incomplete payments. Borrowers would be eligible for forgiveness if they made 120 on-time payments.
Borrowers receiving forgiveness will be notified by Mohela, the student loan servicer for PSLF, and by logging into their accounts and seeing the telltale “smiley face” and $0 balance.
“I literally cried tears of joy,” Meredith Shuman, a 35-year-old who had more than $43,000 forgiven earlier this year after submitting the waiver, told Fortune. “It’s nice seeing all those zeroes.”
The Education Department also recently announced that starting in July 2023, borrowers on the PSLF track will be able to complete the entire application process online, including allowing applicants and their employers to submit signatures electronically for the first time. Previously, borrowers needed to print and sign their form and have their employers sign the form, before mailing or faxing it in.
Other changes to PSLF program
Aside from the waiver, there are other long-term regulatory changes coming to the PSLF to simplify the application process.
Starting in July 2023, borrowers on the PSLF track will receive credit for late payments and those made in installments. Additionally, some periods of loan deferment and forbearance will count toward the 120 payments needed to receive forgiveness, including deferments for cancer treatments, economic hardship, and military service.
Additionally, the Education Department is undertaking a one-time account adjustment for borrowers with a Direct Loan. More payments will count toward loan forgiveness for those in PSLF or on income-driven repayment plans. This will put more borrowers closer to attaining PSLF, or in some cases, result in them having their balance forgiven and even eligible for a refund, depending on how many payments they’ve made. Borrowers don’t need to do anything for this relief.
Status of widespread student debt forgiveness
PSLF is a separate program from Biden’s one-time student debt forgiveness initiative. That program, announced in August 2022, would forgive up to $20,000 in student loans for most federal borrowers, and is currently being reviewed by the U.S. Supreme Court.
As of now, all borrowers can do is wait for the Supreme Court’s decision on whether or not the forgiveness program can go ahead as planned. The decision should be revealed by the end of June. In the meantime, federal student loan payments remain paused.
The outcome of that case will not affect PSLF or the changes to that program the Biden administration has implemented.
