New and Improved

After years of operation so botched that the errors would be comical but for their real world impact, the Public Service Loan Forgiveness (PSLF) program got a much-needed upgrade. It’s more heartening news for many Berkeley Law grads amid the school’s ramped up support for students and alumni pursuing public service (see Walking the Walk).

Intended to cancel repayment obligations for student loan borrowers who spend 10 years in public service jobs, PSLF denied over 95% of applicants in the first years of eligibility. Some students have successfully used the program, including several Berkeley Law grads. But for many public service workers, escaping student debt seemed nearly impossible.

To correct some of its blunders, the U.S. Department of Education announced a new temporary waiver to improve PSLF eligibility and provide relief to students who should have already gotten it. The waiver addresses some choke points in applying for loan cancellation, like the requirement of making 120 payments (10 years’ worth) on specific types of federal loans within certain repayment plans.

The Department now counts payments that may not have satisfied these strict requirements. The waiver alone will benefit over 550,000 borrowers, including an estimated 22,000 eligible for loan forgiveness immediately.

It also greatly expands the definition of a qualifying payment: any federal student loan payment made between October 1, 2007 and October 31, 2022 can qualify for PSLF — regardless of loan type, repayment plan, or if the payment was late or in a partial amount.

These changes are particularly relevant for those who had or still have federal loans through the old Perkins Loans or Federal Family Education Loan programs; have Direct Consolidation Loans; were or are enrolled in repayment plans like Graduated, Extended, or Standard plans; and whose prior payments didn’t quality for PSLF because they were late or not made in full.

All signs point to the Department making more PSLF improvements. They include simplifying the process of applying to cancel indebtedness and broadening access by, among other things, reviewing previously denied applications.

To be evaluated for the waiver, graduates should submit PSLF forms to document all periods of qualifying public service employment.

Some grads may still need to consolidate their loans or switch repayment plans. Instructions and forms are on the Federal Student Aid website. Since the waiver is time-limited, all required actions must be taken before October 31, 2022.

Berkeley Law alums needing help with PSLF or loan repayment can contact the Loan Repayment Assistance Program team at lrap@law.berkeley.edu