September 30, 2022

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134 Groups Urge Biden To Extend Expiring Student Loan Forgiveness Initiatives, While Top Officials Tell Borrowers To Apply Now

A coalition of over 130 organizations wrote to President Biden on Thursday, urging him to extend temporary student loan forgiveness initiatives and the student loan pause that are set to end within a matter of weeks.

Here’s the latest.

Student Loan Forgiveness Through PSLF and IDR Expansion

The Biden administration enacted two significant student loan forgiveness initiatives in the last year:

  • The Limited PSLF Waiver expands eligibility under the troubled Public Service Loan Forgiveness (PSLF) program, which provides federal student loan forgiveness if a borrower works for 10 years or more for nonprofit or public organizations. Under the waiver, the Education Department can retroactively count past loan periods towards PSLF that would previously have been rejected, including past payments regardless of federal loan type, the repayment plan, or whether the payment was made in full or on time.
  • The IDR Adjustment expands eligibility for student loan forgiveness under income-driven repayment (IDR) plans, which allows for federal student loan forgiveness after 20 or 25 years of repayment under plans tied to a borrower’s income. Under the IDR Adjustment, the Education Department can retroactively count past repayment periods (regardless of the federal loan type or specific plan), as well as certain past periods of deferment and forbearance, towards a borrower’s 20 or 25-year IDR loan forgiveness term. The IDR Adjustment also feeds into the Limited PSLF Waiver by allowing certain past deferment and forbearance periods to count towards PSLF, as well.

But both initiatives are temporary. The Limited PSLF Waiver is set to end on October 31, 2022. The IDR Adjustment does not have a specific end date, but the Education Department has suggested it will only be available through the end of the year. Some borrowers — in particular, borrowers with older FFEL-program federal student loans — may have to consolidate those loans via the Direct consolidation program to benefit from either initiative. Since that process can take one to three months, borrowers are rapidly running out of time to qualify.

Groups Urge Biden to Extend Student Loan Forgiveness Initiatives

In their letter, the coalition of civil rights, consumer protection, and labor organizations urged President Biden to extend the relief, given that millions of borrowers may not even know that these student loan forgiveness opportunities are available.

“To ensure your administration’s policies have their intended effect, we urge you to extend the deadline for the PSLF waiver through at least 2023 and calibrate the IDR adjustment timeline accordingly,” wrote the coalition. The groups also urged Biden to expand the programs further by allowing the “entirety of the time since [borrowers] first entered repayment” to automatically count towards student loan forgiveness.

While the Education Department has indicated that over $8 billion in student loan forgiveness has been approved under the initiatives, borrower advocates are concerned that billions more may be left on the table as the programs expire, given that many borrowers may still not be aware of their existence. An analysis published by the Student Borrower Protection Center (SBPC), a advocacy group for student loan borrowers, suggests that there could be as many as 9 million borrowers working in public service jobs who may qualify for relief under the Limited PSLF Waiver, but the Education Department’s data show that only a little over 1 million of those borrowers have initiated PSLF applications.

The Biden administration has not indicated that an extension of the programs is under consideration. Instead, top Education Department officials have been urging borrowers to apply for student loan forgiveness before the deadlines.

“From now until October 31, a Limited PSLF Waiver temporarily changes the program rules” for PSLF, said Undersecretary of Education James Kvaal in a mass email to 22 million Direct loan borrowers earlier in July. “Spread the word with coworkers, friends, and family who work in public service… Tell them to act before Oct. 31!”

Groups Also Urge Biden to Extend the Student Loan Pause

The Limited PSLF Waiver and IDR Adjustment are not the only temporary student loan relief initiatives expiring in the coming months. The ongoing student loan pause, which has stopped all payments and interest on government-held federal student loans since March 2020, is also set to end on August 31, which is in a matter of weeks.

In its letter to President Biden, the coalition urged him to also extend the student loan pause, linking that relief to the expiring relief provided by the Limited PSLF Waiver and IDR Adjustment. “We urge you to… extend the payment pause to a date after which loan cancellations from the Waiver and Adjustment will be processed, to reduce confusion and ensure that borrowers whose loans will be cancelled do not needlessly resume repayment.”

The Biden administration has suggested that another extension of the student loan pause is possible. But officials have not made any final decisions despite the looming August deadline, leaving borrowers grasping for clear information and guidance as time runs out.

The coalition urged the Biden administration to be decisive and clear for borrowers. “The administration must provide clear information to borrowers and the public… so that borrowers and those who work with them fully understand their options and can make informed decisions about how to manage their loans.”

Further Student Loan Reading

5 Things Student Loan Borrowers Should Be Doing Right Now

Biden Administration Has Approved $26 Billion In Student Loan Forgiveness, But Borrowers Face Deepening Uncertainty

3 Key Student Loan Forgiveness Opportunities May End Soon — Here’s How To Apply

If You Went To These Schools, You May Qualify For Student Loan Forgiveness: Here’s What To Do