Loan forgiveness program updates offer new opportunities for educators, all workers

There are new opportunities for educators and other public workers who want to take advantage of the federal Public Service Loan Forgiveness program, thanks to the Biden administration and the work of both our national unions. One of our two national affiliates, the American Federation of Teachers, has been at the center of a lawsuit that has resulted in specific enforcement of new rules that expand options for loan forgiveness.

From now until October 2022, the U.S. Department of Education will be waiving two of the four PSLF requirements. The first is that qualifying payments had to be made under an income-driven repayment plan. The second is that only payments made on Direct loans could count toward PSLF qualification. 

The waiver allows past ineligible loan payments based on payment plan or loan type to count toward the 120 total payments needed to qualify for PSLF. These changes will fulfill a promise of forgiveness made to hundreds of thousands of student loan borrowers. 

Requirements that remain in place include being employed within government, a 501c3 not-for-profit or another not-for-profit organization that provides a qualifying service and working for that employer full-time.

In October, the AFT also announced the settlement of a 2019 lawsuit between the AFT and the U.S. Department of Education and its former Secretary Betsy DeVos. The lawsuit plaintiffs, including an Education Minnesota member, sued DeVos as some of the 97 percent of PSLF applicants whose applications were rejected because of mismanagement of the program by the administration and improper behavior by loan servicers.

As a result of the settlement, the Department of Education now must review any application for Public Service Loan Forgiveness that was denied prior to November 2020. The DOE will automatically begin looking at rejected applications to determine if applicants have made at least 10 years of loan payments. Even if applicants don’t qualify for immediate discharge, the federal government will notify borrowers who were previously denied and update them on the new conditions in the waiver. Denied applicants will also receive information on the steps they need to take to remedy their situation which may result in either an immediate discharge of debt or placement on a path to have their debt discharged down the road.

The lawsuit settlement also will provide an enforcement mechanism for the temporary waiver put in place by the Biden administration to ensure that deceptive practices by servicers are remedied.

Education Minnesota members who are interested in seeing if these new opportunities help them qualify for Public Service Loan Forgiveness should take the following steps:

All interested members should first verify your loan type. Members can access your loan data on studentaid.gov. This system allows you to see a summary of all of your loans you have taken out via a federally-backed program. You can find out what kinds of loans you have, when they originated, how much you have to pay and which servicer holds your loans. To access the site, you will need an FSA ID and password.

If you have federal loans other than just Direct loans, you will need to take three steps. Step one is to consolidate your Family Federal Education loans (FFEL) and Perkins loans into a Direct Consolidation loan by Oct. 31, 2022. After the consolidation is complete, you must then submit a PSLF form to your loan servicer to verify your employment and apply for PSLF.

If you have Direct loans, but have never done any paperwork, you will need to submit a PSLF form to your loan servicer to verify employment and apply for PSLF.

If you have Direct loans and have certified your PSLF-eligible employment, then you just need to wait.

Education Minnesota members have access to an important tool for this process called Summer, which is a free benefit of membership with the AFT.

Summer is an online platform that assists members in applying for and completing the loan forgiveness process. Summer can help members:

Enroll in income-driven repayment plans and manage annual income recertification for these plans;

Complete the PSLF Employment Certification Form and manage the PSLF certification and application process, including reaching out to your employer and getting an electronic signature for you;

Find other options for loan forgiveness programs, including state- and occupation-based loan forgiveness, and get assistance applying for them; and

Talk through options with Summer’s borrower success team so they understand how to best maximize their loan repayment and forgiveness options.

Members can register for Summer at members.aft.org with either your local number and last name, or your member ID number. Direct access can also be provided by members who email DND@edmn.org.

Education Minnesota members also have access to assistance through our Degrees, Not Debt program.

Members can access training on loan forgiveness options, including one on these new PSLF changes, on MEA Online. Specific questions on this program can be emailed to DND@edmn.org but our Degrees, Not Debt team would appreciate specific questions from folks who have read up on the PSLF waiver and taken the training online.