Temporary Public Service Loan Forgiveness waiver could be extended, and other current student loan news for the week of July 5, 2022
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Last week, Federal Student Aid Chief Operating Officer Richard Cordary stated that he is pushing for an extension of the temporary Public Service Loan Forgiveness (PSLF) waiver. Here’s what you need to know about this week’s student loans trends and how they could impact your balance.
1 current trend within student loans for the week of July 5, 2022
1. Head of Federal Student Aid pushes for an extension to the temporary PSLF waiver
At the National Association of Student Financial Aid Administrators (NASFAA) conference last week, head of Federal Student Aid (FSA) Richard Cordray suggested that he is in favor of extending the Public Service Loan Forgiveness (PSLF) waiver, which is currently set to expire on Oct. 31 of this year.
The temporary waiver was implemented by the Biden administration in October 2021 and makes it easier for borrowers to qualify for student loan forgiveness through PSLF. Borrowers who sign up for the program before Oct. 31, 2022, may receive credit for payments on previously ineligible types of loans or on previously ineligible payment plans.
Since its rollout, approximately 145,000 borrowers have qualified for forgiveness under the limited waiver program as of June 2022, according to FSA’s official database. Even more borrowers could benefit if the deadline is extended beyond Oct. 31.
“We’re pushing hard to get approval if we can, to get it extended,” said Cordray at the conference when asked about the potential for an extension. He added that there are further legal implications that factor into the decision, although he didn’t go into detail as to what those implications are or a potential timeline.
How this affects student loans
If the PSLF limited waiver period does get extended, it would allow more borrowers to apply and qualify for forgiveness under the relaxed repayment restrictions. Borrowers with FFEL or Perkins Loans must consolidate their loans in order to take advantage of the waiver, and that process can take anywhere from a few weeks to a few months — so time is running out to meet that Oct. 31 deadline.
With that said, an extension has not yet been confirmed by the administration. If you work for a government or nonprofit and believe that you may qualify for the PSLF waiver, apply as soon as possible. Borrowers who already have Direct Loans can simply submit a PSLF form; borrowers with other types of loans must consolidate first before submitting the PSLF form. In both instances, leave yourself plenty of time to allow for processing.
Here’s how you can get prepared
Whether you’re new to student loans or well into repayment, it’s wise to stay informed about how your student loan rates could change. During 2022, more opportunities for cheaper loans or loan forgiveness could open up; keep an eye on the Bankrate student loans news hub for the latest trends.