Democrats’ plan to fix the Civil Service Student Loan Forgiveness Program


  • Senators Sheldon Whitehouse and Jeff Merkley introduced a bill to fix a student loan forgiveness program.
  • This would simplify the forgiveness of civil service loans by reducing the number of eligible payments.
  • The program has been flawed for years, blocking borrowers from the relief they deserve.

A student loan forgiveness program for public servants such as teachers, the military and firefighters has been plagued with loopholes that have prevented deserving borrowers from getting help – and two Democratic senators say they have a plan to fix it.

Wednesday, Sens. Sheldon Whitehouse of Rhode Island and Jeff Merkley of Oregon introduced a bill first seen by Insider, called the Simplifying and Strengthening PSLF Act, to improve the Public Service Loan Forgiveness (PSLF) program that was created in 2007 to provide public servants, such as nonprofit workers profit and teachers, student debt relief after ten years of repayment.

While President Joe Biden implemented reforms to the program last year to make it easier for borrowers to qualify for the program, 98% of those who applied for the program had already been turned down, warranting further reform.

“The Public Service Loan Forgiveness program promised loan relief to Americans wanting to pursue a career in public service. Instead, they landed in a bureaucratic nightmare with no loan forgiveness in sight,” Whitehouse said in a statement. communicated. “This bill would build on the significant fixes made by the Biden administration last fall and inspire more bright young people to work for the public good.”

In October, Biden announced a waiver that runs through October 31, 2022, that allows borrowers to count payments from any federal loan program or repayment plan toward loan forgiveness through PSLF, including programs and plans. who were previously ineligible. The senators’ bill would build on these changes. Specifically, the bill:

  • Reduce the number of eligible PSLF payments from 120 payments over ten years to 60 payments over five years;
  • Allow any previous student loan payment to qualify for forgiveness progression;
  • Ensure that active duty service members who have deferred payments while in service can be eligible;
  • And allow all borrowers with parent PLUS loans, as well as couples who have consolidated their FFEL loans into one payment, to reconsolidate their loans into a direct loan to qualify for the PSLF.

If this bill were enacted, it would be game-changing for married couples who were advised to combine their student debt balances. Congress shut down the Joint Spousal Loan Consolidation Program in 2006, which allowed married couples to combine their student debt into one loan, allowing them to make one monthly payment with one interest rate. But the law prohibited these couples from separating their loans, even in the event of a divorce, which means that unless the law changes, they could never qualify for the PSLF.

Insider has already spoken to two married couples — both public servants — who are hoping Congress will pass legislation that will allow them to split their student loans and get the relief they thought they had been promised.

“I understand that people have to pay off their debt. I get that part,” said one borrower with Spouse Loans. “But if the government promises debt forgiveness to civil servants after ten years and we find out afterwards that our loans are not eligible, that’s my biggest problem.”

So far, more than 100,000 student borrowers have qualified for the PSLF due to Ministry of Education reforms. And as Biden moves closer to making a decision on a large student loan forgiveness — recent reports suggest he’s considering $10,000 in aid — many officials continue to wait for their student loan forgiveness package. loan brings long-awaited help.

“Public service often already involves financial sacrifice, and it’s even harder to manage if you have huge student loans,” Merkley said in a statement. “This bill to simplify and strengthen the PSLF program will ensure that careers in the public service are accessible to all who strive to do this important work and find a path to a stable economic future for themselves- themselves and their families.”

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