More Students Are Becoming Eligible For Student Loan Forgiveness 

The Biden administration has decided to expand a student federal loan program meant for workers in the public sector. As a result, several hundreds of jobs and millions of debtors will be deemed eligible for these benefits.

What Is The PSLF?

The Public Service Loan Forgiveness program is designed to eliminate employees’ student debts in the public sector. Although the PSLF program was launched back in 2007, its complex rules were poorly understood. At that time, only borrowers who took out Direct-program federal student loans qualified for its benefits. Federal student loans of other kinds did not qualify. Under this program, debtors were required to pay back their debt amounts via an income-based plan. Hence, borrowers who made payments using other plans were excluded. In October of last year, the present administration launched a temporary initiative to expand PSLF benefits. Under this limited waiver plan, borrowers can avail of credits for repayment periods that would not qualify on the basis of older PSLF rules.

How Many Qualify?

The Biden administration has stated that the current temporary waiver has benefitted 70,000 borrowers for whom $5 billion in student loan debts were forgiven. Program officials estimate that hundreds of thousands of such workers will receive further benefits under the temporary relief initiative. The PSLF employment conditions have not undergone much change. However, it is believed that many debtors were not aware of the wide employment scope even under older rules. Together with the existing wide eligibility criteria, the present favorable criteria for borrowers will mean that even more debtors are eligible for federal student loan forgiveness.

Nonprofit Workers

Those working in 501(c)(3) non-profit entities are in general eligible for the PSLF. This will include all kinds of nonprofit organizations, including charitable entities, nonprofit hospitals, nonprofit academics, private institutes, etc. Those organizations that don’t belong to the 501(c)(3) category may be eligible or they may not be. As an example, labor unions and political organizations will not qualify.

Public Servants

Full-time workers employed in domestic government agencies are usually eligible for the PSLF. This includes municipal, state, and federal organizations. Public institutes such as public schools are included.

Employment Role Is Immaterial

The PSLF program is not limited to particular professions or job roles. The employment terms of the program simply stipulate that the employer should qualify. As a result of this, all sorts of personnel in qualifying organizations will be eligible for student loan forgiveness. Hence, nurses, counselors, coaches, and administrators can also apply for PSLF student loan forgiveness in public schools.

Bottom Line

Under the present Biden administration, there has been a substantial increase in the number of eligible borrowers for student loan forgiveness. This number is projected to grow soon to hundreds of thousands of borrowers who can avail of federal student loan forgiveness.