For nearly 15 years, a little-known program within the Federal Student Aid office of the U.S. Department of Education went largely unnoticed.
Many applicants were turned away or simply gave up, confused by complex rules and regulations.
To date, only about 7,000 individuals employed by government or nonprofit organizations had successfully received approval for loan forgiveness. However, this is about to change.
On Thursday, the White House announced an additional $4.5 billion in student debt cancellation for over 60,000 borrowers through the Public Service Loan Forgiveness (PSLF) program.
Career Communications Group spoke with James Richard Kvaal, an education policy advisor who currently serves as under secretary of education at the U.S. Department of Education. Kvaal previously held positions in the education department and the White House during the Obama administration.
A few weeks ago, Kvaal met a special education high school teacher in Michigan who felt drawn to work in special education due to a meaningful friendship he had during his own schooling.
This teacher borrowed $90,000 to obtain the necessary college degree for a special education role.
However, after twelve years of making student loan payments, he still owed $72,000. Struggling to support his family, he was uncertain about ever being able to pay off his loan.
Another educator in the Washington, D.C., Maryland, Virginia (DMV) area first learned about the Public Service Loan Forgiveness (PSLF) program while exploring the Missouri Higher Education Loan Authority (MOHELA) and the federal student aid website.
This educator had been trying to get her loans forgiven for years.
As the child of a single mother with little savings for education, she had to take out loans to complete her bachelor’s degree at Wilberforce University and obtain a master’s degree to continue her job.
"If it weren’t for the PSLF, I would not have had the opportunity to be the first woman in my family to graduate from college," she said, noting that her great-grandmother didn't finish high school, and her mother and grandmother didn’t have the chance to complete college.
This educator, who has 20 years of experience working with children, is grateful for the PSLF program and hopes to help her children graduate without any loans.
Kvaal pointed out that the current system, where individuals must take on substantial loans to gain the education they need, often results in overwhelming struggles to repay those loans.
This situation not only affects borrowers but also impacts society as a whole.
According to LendingTree, Americans collectively owe $1.74 trillion in federal and private student loan debt as of the second quarter of 2024, a decrease of 0.96% from the second quarter of 2023. Of this total, $130.28 billion is attributed to private student loan debt as of September 30, 2023.
The Public Service Loan Forgiveness program has been in existence for over 15 years.
An analyst from LendingTree noted that while the Biden administration has made repeated attempts to forgive student loan debt, a federal appeals court on August 9, 2024, extended a ruling that blocks the administration’s Saving on a Valuable Education (SAVE) relief plan from moving forward.
"The Biden-Harris administration has granted forgiveness on a rolling basis to a million people since the start of this administration," Kvaal shared with Career Communications Group on Thursday. "We’ve worked hard to fix this program," he added, emphasizing that before the Biden-Harris administration, only 7,000 individuals had ever received loan forgiveness under the PSLF. "In this case, we addressed red tape and bureaucratic obstacles," as well as some complex criteria that made the process unfair for people like the special education teacher from Michigan.
Kvaal stated that more than a million people qualify for the Public Service Loan Forgiveness (PSLF) program.
These individuals are employed by federal, state, local, or tribal governments, or by qualifying not-for-profit organizations, with U.S. military service also counting as federal service.
Kvaal mentioned that the Federal Student Aid office within the U.S. Department of Education is currently in the process of notifying borrowers.
However, there have been several hurdles. The original program made a clear promise: if one worked in a public service job for a decade and made their loan payments during that time, any remaining balance would be forgiven.
This meant that individuals could eliminate their student debt by serving their communities for ten years.
Unfortunately, many did not carefully read the fine print, which specified that they needed to have the correct type of loans to qualify for forgiveness after those ten years.
Many borrowers were shocked to discover that they were not in the right repayment plan to be eligible.
Additionally, certain payments that were considered "on time" were not recognized as such under the PSLF guidelines.
As Kvaal explained, a lot of people organized their careers around the PSLF program, believing they were making progress, only to find out later that they had not filed the necessary forms and were not receiving credit for years of payments.
Under a previous administration, as many as 98 percent of applicants were rejected, causing widespread belief that the program was ineffective and not worth pursuing.
Kvaal emphasized the need for assistance in spreading the word, as many individuals remain eligible to apply.
He encourages anyone with student loans to visit StudentAid.gov to explore the Public Service Loan Forgiveness program and other cancellation programs, noting that there are many benefits associated with federal student loans that people often overlook.
For those still doubtful, Kvaal assured that the PSLF is a statutory program and would require legislative action to be changed.
While some advocate for private loans, Kvaal has a different perspective.
He believes that student loan debt affects not just individual borrowers but also their families, making it more challenging to buy a home, start a business, or pursue public service.
He concluded that the current debt financing system for higher education creates significant issues not only for borrowers but for the entire country.
For more information about the PSLF Program, click here.
The PSLF Program forgives the remaining balance on your Direct Loans after you have made 120 qualifying monthly payments under an accepted repayment plan while working full-time for an eligible employer.
Borrowers with federally managed loans may see an increase in their payment counts toward income-driven repayment forgiveness and PSLF.
To be considered for PSLF, you only need to submit a PSLF form. The easiest way to do this is by using the PSLF Help Tool. Click here for more information.
