Why Student Loan Forgiveness Got Easier And How You Can Apply

Here’s how to get student loan forgiveness even if you’re rejected.

Here’s what you need to know.

Student Loans

President Joe Biden, in concert with the U.S. Department of Education, granted $4.5 billion of student loan forgiveness this month through a major overhaul of the Public Service Loan Forgiveness program. If you were rejected for student loan forgiveness, have been unsure whether you qualify for student loan forgiveness, or are curious whether you can get student loan forgiveness now, pay attention. It could mean the difference between no student loan forgiveness and total federal student loan cancellation.

Student loan forgiveness: the changes

The major changes to student loan forgiveness help to correct these major issues, among others:

• which student loan payments count toward student loan forgiveness;
• which types of student loans should count for student loan forgiveness;
• which employers qualify for student loan forgiveness; and
• when student loan payments start counting for student loan forgiveness.

These four issues help remove major impediments that resulted in tens of thousands of student loan borrowers from not getting student loan forgiveness. To qualify for student loan forgiveness through public service loan forgiveness, student loan borrowers must work full-time (at least 30 hours per week) for a qualified public service or non-profit employer, enroll in a qualified student loan repayment plan, make 120 monthly student loan payments, and make at least a majority of those student loan payments while enrolled in an income-driven repayment plan. (Student loan forgiveness won’t be available for everyone, but this plan is available now). Before these changes, the program included a 98% rejection rate. Even with 10 years of qualified public service employment, many student loan borrowers were unable to get the student loan forgiveness they believed they were promised. (Here’s how to get student loan forgiveness).

Student loans: who can get this student loan forgiveness

Any federal student loan borrower who meets the requirements of the Public Service Loan Forgiveness program can get total federal student loan cancellation. With these major changes, student loan borrowers who were previously rejected for student loan forgiveness will have an opportunity to qualify (assuming they meet the other requirements). Here are at least some the student loan borrowers who can now qualify for student loan forgiveness and have their student loan payment count:

• Student loan borrowers who made student loan payments previously, but they weren’t counted properly;
• Student loan borrowers who made student loan payments for FFELP Loans and Perkins Loans;
• Student loan borrowers who used an ineligible student loan repayment plan;
• Student loan borrowers who made student loan payments prior to student loan consolidation into a Direct Consolidation Loan;
• Student loan borrowers who were on active duty in the military, even if their student loan payments were in temporary student loan forbearance or student loan deferment;
• Student loan borrowers who made late student loan payments;
• Student loan borrowers who made partial student loan payments or more than the required student loan payment amount and had their student loan payment rejected or not counted properly; and
• Student loan borrowers who got temporary student loan forbearance through student loan relief due to the Covid-19 pandemic.

Student loan forgiveness: how to get it and how to apply

The U.S. Department of Education has created a simple way for student loan borrowers to get student loan forgiveness if you were previously rejected.

How to apply for student loan forgiveness

To count previous student loan payments, you will need to apply for a limited waiver. The good news is you have about one year to apply. You can apply for the limited waiver for student loan forgiveness through October 31, 2022.

How to appeal your decision for student loan forgiveness

What do you do if you get rejected for student loan forgiveness? Now, the Education Department will give you a second chance. Included in these major changes to student loan forgiveness is the creation of a formal process for student loan borrowers who are rejected for student loan forgiveness to appeal their decision and correct any errors. This will reduce bureaucratic roadblocks and give more student loan borrowers a shot at student loan cancellation.

Student loans: next steps

Biden is focused on expanding who is eligible for student loan forgiveness. (Biden has cancelled $11.5 billion of student loans, but here’s what it means for student loan forgiveness). These changes to student loan forgiveness came shortly after the surprise news that Navient will stop servicing federal student loans. (Here’s why Navient quit your student loans). Biden and Secretary of Education Miguel Cardona are focused on improving student loan forgiveness and simplifying student loan repayment so that more student loan borrowers can get financial relief. Student loan forgiveness also has become a focus in Congress, even if Congress hasn’t passed any legislation on wide-scale student loan forgiveness. This week, Cardona also confirmed during a town hall meeting that wide-scale student loan forgiveness is still a possibility as discussions within the Biden administration are ongoing.

Whether you are pursuing student loan forgiveness, make sure you understand all your options for student loan repayment. With student loan relief expiring, get ahead now. Here are some popular ways to save money with your student loans:

Student Loans: Related Reading

Biden cancelled $11.5 billion of student loans, but here’s what it means for student loan forgiveness

Student loan forgiveness won’t be available to these borrowers

Major changes to student loan forgiveness may come this week

How to get student loan forgiveness

Source: Forbes