A letter signed by more than 200 organizations is urging Education Secretary Miguel Cardona to reform Public Service Loan Forgiveness (PSLF). The letter’s suggestions include streamlined eligibility criteria and an automated process for verifying and distributing loan forgiveness. Here’s what you need to know about this week’s trends.
1 current trend within student loans for the week of Sept. 27, 2021
1. Hundreds of organizations call for administrative action to improve Public Service Loan Forgiveness
More than 200 organizations sent a letter last week to Secretary of Education Miguel Cardona calling for amendments to Public Service Loan Forgiveness (PSLF), a program that promises federal student loan forgiveness for public service workers after 10 years of qualifying payments. The organizations included in the letter include union, student, public health and military organizations, among others.
The letter highlights the complexity of the current program, which has made it difficult for borrowers to receive the promised forgiveness. It suggests three primary reforms to the program through administrative action:
- Streamline criteria to eliminate student loan debt for everyone who has worked in public service for at least a decade, regardless of their current employment status.
- Grant credit for public service workers’ previous years of service, regardless of loan type, loan status or repayment plan.
- Make forgiveness automatic for eligible borrowers.
How this affects student loans
The letter comes on the heels of data released by the Student Borrower Protection Center showing that thousands of teachers have been denied PSLF due to clerical errors or pieces of missing information. The latest data from the Department of Education also shows that most borrowers were denied forgiveness not because of employment requirements, but because of a lack of qualifying payments — even if they’ve been repaying student loans for more than 10 years.
An automated process, as the joint letter suggests, could solve many of these issues; the transition into automated data matching recently helped 880 percent more military members qualify for a federal student loan interest waiver than in 2019, and PSLF could follow a similar trend.
The Department of Education is currently investigating ways PSLF could be improved, so changes could be on the way. The department accepted public comments about the program through Sept. 24, and over 40,000 comments were submitted online.
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. As 2021 continues, 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.