Department of Education Overhauls Troubled Public Service Loan Forgiveness Program
October 08, 2021

​​The Biden administration on Wednesday announced plans to reform the troubled Public Service Loan Forgiveness (PSLF) program and start fulfilling its promise to help student loan borrowers who have committed to at least a decade in a public service career.

Only 1-2 percent of PSLF applicants have been approved each year since the program was first established in 2007, a stunningly low outcome. The problems stem from the complicated requirements set out by Congress and have been made worse by poor administration of the program by student loan servicers and lack of oversight by the Department of Education (ED).

The administration plans to use executive action to enact these basic reforms:

  • ED will allow student borrowers to count payments from all federal loan programs or repayment plans toward forgiveness.
  • ED will simplify what it means for a payment to qualify for PSLF and will automatically adjust PSLF payment history in cases where payments didn’t count because of the loan program type, payment plan, timing, or amount.
  • ED will allow all months spent by service members on active duty to count toward PSLF, even if the service member’s loans were in deferment or forbearance rather than in active repayment.
  • Next year, ED will begin automatically giving federal employees and service members credit for PSLF by matching ED data with information from other federal agencies.
  • ED will complete a review of denied PSLF applications, denial patterns, and PSLF processing practices to identify and address errors.

ED estimates that over 22,000 people will receive immediate forgiveness, and another 550,000 will get an average of two more years of progress toward forgiveness. However, the changes are temporary—made using emergency authority from the pandemic—and borrowers must apply by Oct. 31, 2022, to take advantage of them. The administration is working to make many of the revisions permanent.

“The announcement lays out a roadmap for a comprehensive reform of the program, one that will serve those who commit to public service and through them, will serve the nation,” said ACE President Ted Mitchell in a statement. “We applaud that commitment. As Secretary Cardona made clear, at the end of the day, the program needs to be comprehensively and permanently revamped, and legislation is required to accomplish that. We look forward to working with the administration and Congress to that end.”