CORPUS CHRISTI, Texas — The U.S. Department of Education is making changes to its forgiveness program which are aimed at clearing up some long-standing issues.
“The problem is that with the public service loan forgiveness pretty much since it began many borrowers have been confused by the eligibility rules,” student loan counselor Andrew Pentis said.
The basic premise of the Public Service Loan Forgiveness is that that a borrower working in public service, like teaching can make payments for 10 years and then have their student loans forgiven.
But there was a certain payment plan borrowers needed to be on in order to be eligible for that forgiveness.
That process has been unclear, leaving many borrowers to believe the payments they've made for years counted toward the program when they didn't.
The changes offer a waiver borrowers can fill out to make those payments count.
It's expected to help 550,000 people. For about 22,000 the changes should happen automatically without having to take any additional steps.
“For borrowers who have lost payments, because of things like it didn't come in on the right date the payment was a little too much or little too, too little those payments will be automatically recounted and added towards their public service loan forgiveness totals,” said Center for Responsible Lending senior policy council Whitney Barkley-Denney.
Another big change is for military-service members. Time spent while on active duty now will be credited toward the forgiveness program.
Student loan experts say although today's announcement is exciting news, although there are still some changes to PSLF they're hoping to see.
“We would like to see the time of service moved from 10 years until five years that's one thing that we're going to be asking for," Barkley-Denney said. "And we also would like to see like I said some of some more people brought in to having their payments counted like people who are on hardship deferrals and will certainly be digging in over the next few days and seeing what other improvements we'd like to see, but this is certainly a really, really good start."
You can get more information on the PSLF changes and the action you need to take in order to benefit by checking at this website.