Student Loan Debt: Big Changes Coming to ‘Broken’ Public Service Loan Waiver Program
As part of the program, which was enacted by then-President George W. Bush in 2007, the government waives remaining federal student loan debt for skilled public sector workers after making monthly payments for 10 years. It encourages workers to stay in lower-paying jobs – like teaching and social work – while paying off student debt.
Over a million borrowers have made at least one qualifying payment, but only a small percentage of registrants have received a rebate. About 5,500 people have had their debt written off, according to the latest government data.
Riddled with problems
To be eligible for public service forgiveness loans, borrowers must have the right type of federal student loan, be enrolled in the right type of repayment plan, and be employed full time in qualifying public sector jobs, while also being in the right type of repayment plan. making the 10 years of monthly payments. .
The first time someone would have made enough payments to qualify for a rebate was under the Trump administration in the fall of 2017. But many of these early claimants found that some or all of their loans weren’t of the right type.
More than 80% of borrowers who filed forms that did not meet all of the program’s requirements have an ineligible federal family education loan, according to government data. These loans, which were made by private lenders but supported by the government, were mostly phased out after 2010. They were replaced by federal direct loans from William D. Ford, which are made and guaranteed by the government and are eligible for the public service loan. Forgiveness.