Student Loan Forgiveness Must Be Extended, Attorneys General Warn Biden
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Student loan forgiveness must be extended, 20 state attorneys general have warned President Joe Biden.

Here’s what you need to know — and what it means for your student loans.

Student Loans

In a letter to Biden, the attorneys general from 20 states — including Illinois, California, New York and Massachusetts — want to ensure that student loan borrowers get access to student loan forgiveness before the limited waiver expires on October 31, 2022. Biden has three important decisions for student loans that are approaching in the coming weeks. First, Biden will decide whether to enact wide-scale student loan cancellation. Second, the president will determine whether to extend the student loan payment pause. Third, Biden will consider the future of the limited waiver for student loan forgiveness. It’s the third decision — the limited waiver for student loan forgiveness — that attorneys general want to be extended beyond October 31. The attorney general want to ensure that student loan forgiveness is accessible, particularly for public servants.


Student loan forgiveness: limited waiver

Specifically, the attorney general write:

  • all periods of student loan forbearance should count toward public service loan forgiveness;
  • student loan servicers who committed “forbearance steering, servicing errors, and failure to advise” student loan borrowers should be regulated;
  • extend the limited waiver beyond October 31 and at least until new regulations for public service loan forgiveness become effective;
  • grandfather in any benefits for the limited waiver for borrowers who miss administrative deadlines; and
  • the waiver for student loan forgiveness should be available to all federal student loan borrowers, including Parent PLUS Loan borrowers.

The Public Service Loan Forgiveness program was created in 2007 to help full-time public servants and non-profit professionals get federal student loan cancellation. However, at times, up to 99% of student loan borrowers have been rejected from the program. To qualify, student loan borrowers must work full-time (at least 30 hours a week) for a qualified public service or non-profit employer. They also must enroll in an income-driven repayment plan and make at least 120 monthly student loan payments. Biden has sought to fix public service loan forgiveness. Since becoming president, Biden has canceled $8 billion of student loans for public servants.


Student loan cancellation: how the limited waiver works

Biden’s Education Department announced major changes to student loan forgiveness. Biden wants to help millions of student loan borrowers get student loan cancellation and student loan forgiveness more easily. The goal of the limited waiver for student loan forgiveness is to allow borrowers to “count” student loan payments that were previously ineligible toward student loan forgiveness. Here are some key benefits of the limited waiver for student loan forgiveness:

  • FFELP Loans and Perkins Loans student loan payments will count for student loan forgiveness;
  • student loan payments before student loan consolidation count toward student loan forgiveness;
  • student loan payments made under the wrong student loan repayment plan would count toward student loan forgiveness;
  • late or incorrect student loan payments count toward student loan forgiveness; and
  • student loan payments made during active military service — even if the borrower was enrolled in temporary student loan forbearance or deferment — count toward student loan forgiveness.

Biden proposed to make limited waiver for student loan forgiveness permanent

Biden’s major changes to student loan forgiveness will make at least some features of the limited waiver for student loan forgiveness permanent beyond October 31. While these major changes aren’t finalized, Biden could implement them through the U.S. Department of Education rulemaking process. For example:

  • make it easier for student loan borrowers to qualify for student loan forgiveness;
  • “count” partial, lump-sum, and late student loan payments toward student loan forgiveness; and
  • allow certain types of student loan deferments and student loan forbearances (such as those for military service, National Guard duty and Peace Corps and AmeriCorps service) to count toward public service loan forgiveness.

That said, the U.S. Department of Education says that some of the limited waiver provisions will not become permanent due to “statutory restrictions.” For example, if you have FFELP student loans. you should apply for public service loan forgiveness before October 31, 2022 to ensure you can “count” previous student loan payments under the limited waiver for student loan forgiveness. The president is days away from announcing major decisions on student loan forgiveness and the student loan payment pause. Are you prepared? Make sure you understand all your options for student loan repayment. Proposals are one thing; policy and implementation are another. Here are some of the best ways to pay off student loans faster and save money:


Student Loans: Related Reading

Student Loans: 3 important deadlines

What your new student loan servicer means for student loan forgiveness

Senators propose major changes to student loan forgiveness

Education Department cancels $6 billion of student loans

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