It could soon get even easier for feds to qualify for student loan forgiveness

Federal employees may soon see another set of reforms that would make it easier for them to get their student loan debt forgiven. 

The Education Department on Wednesday unveiled a package of proposed regulations aimed at improving the process of applying for a range of programs to forgive debt from educational loans, including the Public Service Loan Forgiveness Program, which eliminates debt for those who have made 10 years of regular payments while working for a qualifying government or nonprofit organization. The proposed regulatory changes come in response to concerns expressed by borrowers and experts on the loan programs, the department said. 

“We are committed to fixing a broken system,” said Education Secretary Miguel Cardona, in a statement. “If a borrower qualifies for student loan relief, it shouldn’t take mountains of paperwork or a law degree to obtain it.”

The Public Service Loan Forgiveness Program portion of the reforms would build on an October 2021 overhaul that made the program—established in 2007— easier to use and significantly increased the amount of debt forgiven. The October 2021 changes established a temporary waiver to ensure that federal workers and other public servants who had tried to follow the program’s rules could benefit from it. The waiver gave borrowers until Oct. 31 to consolidate their loans into the correct Direct Loan program. It also made changes such as allowing late payments to count toward the program and giving credit for time in active duty military service when their loans are technically considered in deferment or forbearance. 

The new proposal would extend some parts of the waiver program such as ensuring that more types of payments qualify toward the program including partial, lump sum and late payments. It would also give credit for certain types of deferments and forbearances such as Peace Corps and Americorps service and cancer treatments in addition to military service. And it would establish a formal reconsideration process for borrowers who had their applications denied; the waiver program had created an interim process. 

It would not, however, continue all of the waiver provisions “due to statutory restrictions,” the Education Department cautioned in its statement. “Borrowers seeking to count their payments on Federal Family Education Loans toward forgiveness should apply for PSLF before October 31, 2022.”

The Education Department released a fact sheet that provides more details on the proposed regulations and how they would apply to the Public Service Loan Forgiveness Program. Once the proposal is formally published, the department will accept comments for 30 days and plans to finalize the rules by Nov. 1 so they can take effect by next July. 

Government Executive readers recently shared their experiences with the Public Service Loan Forgiveness program in a series of interviews. You can read the interviews here and listen to the stories on the June 21 GovExec Daily podcast.