$5.8 Billion In New Student Loan Forgiveness Benefits First Responders, Teachers

A Note From Patricia:

Hello and welcome to Forbes Advisor’s Weekly Brief, where each week we dive into the realities of consumer finance and empower you with the knowledge to help make your financial journey easier. 

The White House announced another $5.8 billion in student loan debt relief—this time for public service workers, including teachers, firefighters and nurses.

This most recent wave of student loan forgiveness follows improvements and fixes to the Public Service Loan Forgiveness (PSLF) program. Created in 2007, the PSLF program was riddled with issues so grave that only 7,000 people received loan forgiveness prior to these changes, according to the Department of Education.

But the Biden Administration’s revamp of the program loosens some of its most restrictive rules, which could benefit more than 871,000 public service workers.

This week, we discuss who qualifies for PSLF and how to apply. 

$5.8 Billion In New Student Loan Forgiveness Benefits First Responders, Teachers

According to the White House, almost 78,000 first responders and public workers, such as firefighters, nurses, and teachers, will soon receive student loan forgiveness under the PSLF program. Eligible borrowers will receive notification emails from the Department of Education as early as this week.

PSLF is a federal student loan repayment program that offers student loan forgiveness to public servants who make 120 qualifying monthly payments on their loans. However, many borrowers had previously been unable to access that forgiveness because of complicated eligibility criteria or loan servicers misleading people into thinking they didn’t qualify.

In October 2021, President Joe Biden placed a one-year waiver on the PSLF program, allowing borrowers to receive credit for any past loan payments that had otherwise been ineligible due to an array of issues, including not having enough qualifying payments and missing information on the application, according to the U.S. Government Accountability Office. The Biden administration also provided borrowers with more information about which employers and payments qualify and simplified the application process by creating a single application form.

Now, relief has become available to another 871,000 borrowers, according to the Biden administration. 

If you’re wondering if you qualify for PSLF forgiveness, here are the criteria you must meet to be eligible: 

• Work full-time for a U.S. federal, state or local government organization or a qualifying nonprofit organization. If you’re not sure if your organization qualifies, visit the Federal Student Aid website to verify eligibility using the employer search tool.
• Have direct loans under an income driven repayment (IDR) plan. You can also use a direct consolidation loan if you don't have direct loans
• Make 120 qualifying monthly payments on your loans

If you believe you meet these requirements, you must complete the Public Service Loan Forgiveness and Temporary Expanded PSLF Certification and Application annually, or whenever you change employers. You can do so through the Department of Education’s website.

To learn about how to qualify and apply for student loan forgiveness, read more here.

Related Stories: 

• Best Private Student Loans Of March 2024
• Student Loan Forgiveness For Nonprofit Workers
• 800,000 Student Loan Borrowers Get Forgiveness Emails From Biden Administration   

Here’s what else is going on in the news this week:

• March Fed Meeting: Stocks Reach Record Highs On News Of Future Rate Cuts In a widely anticipated move, the Federal Open Market Committee has opted to maintain its federal funds interest rate at the current target range of 5.25% to 5.5%.
• Time’s Running Out For Student Loan Forgiveness—Here’s How To Qualify Student loan borrowers with several types of commercially managed student loans have until April 30 to consolidate them and take advantage of the one-time payment count adjustment this summer.