NJ loan forgiveness: Phil Murphy highlights program
NEW JERSEY – Governor Phil Murphy and federal officials gathered at the College of New Jersey on Monday to highlight a unique pandemic-era waiver that allows public service employees to pay their debt. federal student against their years of full-time employment.
During the visit to Ewing College, Murphy shed light on the Federal Civil Service Loan Forgiveness Program for civil servants and encouraged more to apply and benefit from it.
“The cost of college loans is one of the starkest examples of the affordability challenge facing our state and our nation more broadly,” Murphy said, calling the program a “hidden gem.”
The one-time exemption will allow anyone who has worked full-time in eligible public service employment since October 2007 to qualify for loan forgiveness. That includes people who were previously unqualified, Murphy said.
More than 2,500 state residents now have $167 million in debt forgiven with an average forgiveness of more than $65,000 per person, Murphy said. About 31,000 New Jersey residents are enrolled in the main public service loan forgiveness program.
Murphy and federal officials encouraged teachers and nurses to apply for the program, created in recognition of the extraordinary risks and responsibilities that public employees have assumed during the COVID-19 public health emergency, before the October deadline. .
The Biden administration overhauled the civil service loan forgiveness program in October. For years, thousands of borrowers had applied for forgiveness under the program, but nearly all were turned down by the federal government.
Students and government officials participated in the discussion with the Governor, US Undersecretary of Education James Kvaal and Director General of Federal Student Aid Richard Cordray.
The town hall meeting at the college comes amid speculation that President Joe Biden will use his executive power to write off some federal student debt, and months before November’s midterm elections.
In April, Biden said he would have an answer on student debt forgiveness after a ‘Hard look’ at further debt forgiveness. Biden promised during his run for president to forgive $10,000 of debt per borrower. He also said federal student loan debt reform would be a priority for his administration.
Clearing federal student debt for public employees — including public school teachers — is a priority, Biden said.
New Jersey is exploring options to streamline the federal program for its 61,000 state employees, Murphy said. One of these avenues is to automatically enroll them in the program, as a way to increase participation.
Public employees can refinance their private loans into the federal program to qualify for the loan forgiveness program.
Who is eligible for student loan forgiveness?
The government had limited eligibility for the Civil Service Loan Forgiveness Program to certain types of federal student loans and specific repayment plans.
But through October 2022, borrowers who have made 10 years of payments while working in eligible jobs — like in federal, state or local government, nonprofits, or the U.S. military — will now be eligible. to loan relief, regardless of the type of federal government. loan or repayment plan they have.
Repayments of past loans that were previously ineligible will now be considered, bringing some borrowers closer to forgiveness. This should be especially helpful for borrowers with federal home education loans.
Among other changes, the department will allow service members to count active duty time toward 10 years, even if they pause their payments during that time.
How do I know if my past or current employer is eligible for the PSLF?
Use this help tool from the Federal Student Aid website to check if you work for an eligible employer: studentaid.gov/pslf.
It provides information on employers who meet the requirements of the Civil Service Loan Forgiveness Program.
How can I check which federal loans I have?
If borrowers are unsure of the type of loan they have, they can ask their loan officer for this information or they can check the federal government’s website for financial assistance, said Betsy Mayotte, president of the Institute of Student Loan Counselors.
If you’re not sure what type of federal loans you have, you can find out by logging into your account on StudentAid.gov, going to the My Aid page, and scrolling down to the Loan Breakdown section.
If I am eligible, what steps should I follow?
The changes to the Loan Forgiveness Program will take place in two parts.
The agency will first relax some of the rules that had prevented eligible borrowers from paying their loans, via a limited waiver. The government, for example, will allow payments on one of a person’s loans to count toward the total number required for forgiveness.
The civil service loan forgiveness waiver will be available to borrowers who have direct loans, federal home education loans and Perkins loans.
Parent PLUS loans not eligible under the limited waiver
The ministry said it will automatically credit borrowers who already have direct loans and have proven they work in an eligible field. Others who did not enroll in the program or have ineligible federal loans will need to apply for forgiveness, which may require them to consolidate their loans. Borrowers will have until October 2022 to apply.
To learn more about credit consolidation, go to https://studentaid.gov/manage-loans/consolidation.
The Department of Education also plans to review all denied civil service loan forgiveness applications and provide federal employees with automatic credit for the forgiveness.
Other changes will happen more slowly via regulations created by “rule-making”, a long and complicated bureaucratic back and forth between government and other stakeholders.
For more information, visit StudentAid.gov/PSLFWaiver.
This article contains material from USA TODAY.
Mary Ann Koruth covers education for NorthJersey.com. To get unlimited access to the latest news about schools in New Jersey and how it affects your children, please subscribe or activate your digital account today.