The United States Department of Education will be dropping off requirements around the Public Service Loan Forgiveness programme, an initiative that was launched over a decade ago with the aim to drive college graduates towards public service.
The programme, which was formulated by the United States Congress, has helped only 5,500 borrowers in getting their loans erased. Those who wished to subscribe to this initiative were supposed to pay 10 years of payments on their federal student loans in order to get the remaining amount adjusted.
However, Public Service Loan Forgiveness had a series of shortcomings that resulted in thousands of people getting stuck with debt that otherwise should have been dismissed till now. As many as 90% of the applicants to the programme have been rejected, according to reports from Associated Press.
Many borrowers have found that they have the wrong type of federal loan or repayment plan to be eligible for the programme.
Under the temporary changes, those borrowers will now be eligible to get their loans erased.
Through October 2022, borrowers who have worked 10 years in a qualifying job will be eligible for loan relief no matter what kind of federal loan or repayment plan they have.
Past loan payments that were previously ineligible will now count, moving some borrowers closer to the finish line, according to reports from Associated Press.
According to the United States Department of Education, as many as 22,000 borrowers will be directly eligible to get their loans dismissed after the changes. Additionally, 27,000 could fall into the eligibility criteria in case their past payments have been certified. In total, more than 550,000 borrowers will be moved closer to forgiveness.
United States Secretary of Education Miguel Cardona said, “Borrowers who devote a decade of their lives to public service should be able to rely on the promise of Public Service Loan Forgiveness”, according to reports from Associated Press.
The department’s chief added, “The system has not delivered on that promise to date, but that is about to change for many borrowers.”