A federal program failed to fulfill its promise of offering student debt relief to thousands of public workers, including teachers, police officers and firefighters. Now, the government is trying to make it right.
On Wednesday, the U.S. Department of Education announced sweeping changes to its Public Service Loan Forgiveness program after thousands of borrowers applied for forgiveness, with nearly all of them being rejected by the federal government.
After making a decade of payments, many found out that they had the wrong type of federal loan or repayment plan to be eligible for the program. Thousands have been straddled with debt that they thought would be erased.
The overhaul is also designed to let borrowers correct errors and count payments they were trying to make toward the program. It is expected to shorten the amount of time more than 550,000 borrowers – those who have already consolidated their loans – are required to make payments to qualify for forgiveness, the government said.
The changes will immediately erase the debt of 22,000 borrowers to the tune of $1.7 billion, the agency said. The government estimated another 27,000 borrowers could see about $2.8 billion in debts forgiven if they prove they were employed in an eligible job.
