The Biden administration has implemented a set of piecemeal fixes to improve existing student loan forgiveness programs in the last two years. Those changes have led to the Education Department writing off $26 billion in federal loans tax-free.
Public servants are among those who’ve benefited the most from these improvements.
Related: PSLF Changes
For years, tens of thousands of people who spent a decade working in public service were locked out of the PSLF Program. The reason? Despite dutifully paying on their loans for years, many had the wrong types of loans. They had older FFEL and Perkins Loans instead of newer Direct Loans.
Had they known, those borrowers could have easily moved their debts into the Direct Loan Program by consolidating. But the vendors the Education Department hired to help educate borrowers about its forgiveness programs fell asleep at the wheel. Student loan servicers like FedLoan Servicing and Navient let borrowers they knew were working full-time in public service employment keep making monthly payments towards ineligible loans.
Last fall, the Education Department introduced a waiver that promised to fix the so-called “wrong loan” problem — at least temporarily. The Limited PSLF Waiver, which expires in October, gives borrowers PSLF credit for:
Payments made toward FFEL Loans and Perkins Loans.
Payments made under non-qualifying repayment plans (e.g., Extended or Graduated plans).
Related: What Repayment Plans Qualify for PSLF?
The PSLF Waiver has been a huge success — for everyone except those with Parent PLUS Loans. Since October, the department has written off $8.1 billion in student debt for 145 thousand borrowers. Parents who borrowed federal Direct Loans for their children can’t use the waiver to shed their debt. But that hasn’t stopped some parents with their own student loans from trying.
Curious if your employer qualifies? Use the PSLF Help Tool to search for eligible employers.
Learn More: Are FFELP Loans Eligible for PSLF?