Student loan borrowers urged to apply for forgiveness program: Here's who qualifies

While Americans await the Biden administration's decision on federal student loan forgiveness, the Education Department is encouraging millions to consider applying for a forgiveness program that's already in place.

(NEXSTAR) -- While Americans await the Biden administration's decision on federal student loan forgiveness, the Education Department is encouraging millions to consider applying for a forgiveness program that's already in place.

In a Thursday tweet, Education Department Secretary Miguel Cardona said the Federal Student Aid office was sending emails to roughly 22 million of the 45.3 million borrowers in the U.S., urging them to see if they're eligible for loan relief under the Public Service Loan Forgiveness program.

The program, commonly known as PSLF, is intended to help certain borrowers working in the public sector by forgiving their federal student loans after 120 payments over 10 years. The number of applicants actually having their loans forgiven has been low - just 1 in 5 of the 1.3 million borrowers pursuing debt discharge through PSLF are on track to see relief by 2026, according to a September report by the Student Borrower Protection Center.

Last year, the Education Department rolled out a waiver on specific PSLF requirements to grant borrowers credit toward loan cancellation regardless of their federal loan type or if they had been enrolled in a specific payment plan, as long as they consolidated their debt into a Direct Loan before the end of the waiver.

Prior to the waiver, borrowers needed to have a specific federal loan — a Direct Loan — to qualify for PSLF. Borrowers could consolidate their debt into Direct Loans for PSLF, but any payments made on the loans before consolidation didn’t count toward the required tally.

This waiver is currently set to expire after October 31, 2022, meaning eligible borrowers have less than four months to apply. Richard Cordray, the head of Federal Student Aid, said at a conference earlier this year that while he is pushing for the PSLF waiver to be extended, President Biden may lack the executive authority to approve such a move.

PSLF qualifications

Over nine million public service workers likely qualify for debt cancellation through the PSLF program, but have yet to file the paperwork to start the process, a recent report from the Student Borrower Protection Center found. California, Texas, Florida, and New York have the most public service workers with student loan debt, according to SBPC.

As explained above, PSLF is intended to give eligible public service employees debt forgiveness after a set number of payments are made.

Eligible borrowers must:

• Be employed by a U.S. federal, state, local, or tribal government or not-for-profit organization (federal service includes U.S. military service)
• Work full-time for that agency or organization
• Have Direct Loans (or consolidate other federal student loans into a Direct Loan)
• Make 120 qualifying payments

Under the current PSLF waiver, eligible borrowers can receive credit for payments made on other loan types, under any payment plan, before consolidation, or after the due date. Those who received Teacher Loan Forgiveness can apply the period of service that led to their eligibility toward PSLF, if they can certify PSLF employment for that period.

How to determine if you qualify for PSLF

First, you'll want to visit the FSA’s website and logging into your account. You’ll be able to search your employer within the FSA’s database and add information about your employment. Once you find your employer, you’ll be able to see whether it qualifies under PSLF.

Next, according to SBPC’s walkthrough guide, you’ll want to determine which type of federal student loans you have. Direct Loans are eligible for PSLF while other loans need to be consolidated into a Direct Consolidation Loan. Until the end of October 2022, previous qualifying payments you’ve made on a non-Direct Loan will count for the necessary 120 payments PSLF requires for forgiveness.

Once you’ve completed the steps above, you’ll need to confirm your employment. You should then be able to submit your PSLF form.

The FSA has created a help tool to guide borrowers through completing the form.

Who qualifies for the already-approved student loan forgiveness?

While widespread student loan forgiveness hasn’t yet become a reality, some U.S. borrowers have already received some debt relief. Roughly 1.3 million borrowers have seen $26 billion in student debt forgiveness since President Biden took office.

In addition to the thousands of borrowers that have received debt cancellation under the revamped PSLF program, another 690,000 borrowers have had a total of $7.9 billion in student loans erased through discharges due to borrower defense and school closures. Over 400,000 borrowers have received more than $8.5 billion in debt forgiveness through total and permanent disability discharge.

Last month, the Biden administration agreed to cancel $6 billion in federal student debt for roughly 200,000 borrowers as part of a proposed class-action settlement. The borrowers claim their college defrauded them and their applications for relief from the Department of Education were delayed for years.

Biden is expected to announce his plans regarding more widespread student debt forgiveness in July or August.