Lawyers who are burdened with student debt and have been denied participation in the Public Service Loan Forgiveness (PSLF) program may be eligible to have their loans forgiven under new rules temporarily in effect through October 2022.
The PSLF program, which the ABA has been advocating for since its creation in 2002, provides a financial tool to support government and nonprofit service providers who help ensure the delivery of vital services to the public. It is also a recruitment and retention tool that helps reduce student loan debt obligations for eligible professions, including public service lawyers. The program authorizes the forgiveness of any remaining federal student loan debt for individuals who have worked full time in government or at an eligible nonprofit organization doing public service work. Individuals also must have made at least 120 monthly payments on time.
For many, Department of Education regulations implementing the PSLF program have been confusing and retaining eligibility through 10 years of public service has proven difficult. This lack of clear guidance has resulted in denied applications for most people. Recent changes, however, have given hope and loan forgiveness to many, including those previously denied access to this valuable public service incentive. But eligible borrowers must act soon because some changes are only temporary.
Last September, the ABA hosted a Student Debt Week of Action where thousands of social media posts and messages to Congress helped highlight the critical need for student debt relief and improvements to the PSLF program. Working with The Coalition to Preserve PSLF, ABA members also contributed to the more than 45,000 responses sent to the Department of Education by its September deadline for public input on the PSLF program.
The month following the ABA’s Student Debt Week of Action, the Department of Education announced plans to overhaul PSLF to make it easier for borrowers to understand and access the PSLF program. The department’s fact sheet outlines significant changes to the program rules, including a limited waiver of some of the prior requirements that will be in effect only through Oct. 31.
The new rules allow eligible borrowers to count payments made on certain federal loans and repayment plans that were previously deemed ineligible to qualify as payments for loan forgiveness. For example, if borrowers did not receive credit for federal loan payments because the payments were:
- not made on an eligible type of loan (previously only Federal Direct Loans were eligible),
- not made on an eligible repayment plan (previously only Income-Driven Repayment plans were eligible), or
- not made on time or were made for incorrect amounts
then they may be eligible to receive retroactive credit for such payments, if they take action before the Oct. 31 deadline.
To learn more about the new PSLF qualifying rules and what’s changed under the limited waiver, visit here. Also follow the ABA Grassroots Action Center on Twitter @ABAGrassroots to track further developments.