PSLF Changes: A Fresh Start or Broken Promise?

by Christina DeVries, Director of Development

Photo by Andy Feliciotti

A full decade. 10 birthdays. 3,650 days. 108,160 hours of work if you’re working 40 hours a week. 120 on-time and full payments. Is that enough energy to have any of your remaining federal student loans forgiven? Since 2007, the federal government has stated that a decade should be enough for public servants – non-profit professionals or people working within our government - to have their federal loans forgiven. The program has long assumed that people working in public spaces will be making less money than for-profit institutions.

However, the Public Service Loan Forgiveness Program is notoriously unreliable- rarely providing promised relief. Whistleblower reports in 2018 showed the rates of declined applications were at 99%. Since the program began nearly 15 years ago, only 16,000 people have had their loans forgiven, according to NPR.

Last month the federal government introduced revised eligibility requirements for the Public Service Loan Forgiveness Program. For the next year, people with federal student loans can apply for the program without consolidating their loans and without enrolling in an income-based repayment plan. These changes have also allowed previous payments to count towards the 120 payments needed to be eligible for forgiveness. There are expanded eligibility for teachers, military service members, previously declined applicants, and those with Direct Loans.

According to the Department of Education, the limited wavier that runs through October 2022, could support over 550,000 borrowers who had consolidated their loans and then had to restart their 120 payments. The department also estimates 22,000 borrowers will immediately have federal loans discharged, and another 27,000 could qualify for forgiveness once they certify employment that was previously not included.

So, why give the government another chance?

For many borrowers, their options remain limited. Hopefully, this revised program will provide relief instead of keeping borrowers stuck in a web of bureaucracy and looming payoffs.

The cost of higher education continues to rise, while the investment in higher education from the government continues to decline. The federal government implied the pace of loan payoff, 25 years, is a reasonable investment for a degree. By now many of us have lived or know the costs of living with student loan debt: renting instead of buying a home, paycheck-to-paycheck living, delaying partnerships, or starting families, and living without emergency savings. A liberal arts education provides exposure to ideas beyond ourselves and our communities, but what good is this exposure, if we are crushed by the financial burdens to truly live?