Student Loans

Face the Facts: Who's Eligible for the Public Service Loan Forgiveness Waiver?

The executive director of the Student Loan Fund explains who is eligible for the public service loan forgiveness waiver ahead of the Oct. 31 deadline.

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The president's student debt relief plan made headlines recently, offering to wipe out $10,000 to $20,000 in loan debt.

But there's another program that hasn't gotten nearly as much attention, and time to apply for it is running out.

NBC Connecticut's Mike Hydeck spoke with Executive Director of the Student Loan Fund Cristher Estrada Perez about it.

Mike Hydeck: So we're talking about the public service loan forgiveness waiver. It's for people like teachers and firefighters and police who are in public service. And it's been around for a while, but why haven't more people taken advantage of it?

Cristher Estrada Perez: Absolutely, that is a really good question. So the program has been around since 2007, but by January of 2021, only 7,000 borrowers had had their loans forgiven under PSLF. So 99% of those borrowers were denied. And it has to do with historically poor program administration, loan servicer misconduct and really a failure to properly communicate requirements to borrowers, leaving borrowers not knowing exactly what loan type they should be, and what kind of repayment plan they should be at. So a lot of borrowers who were completing their service of 10 years were finding that they were in the wrong loan type, they had the wrong repayment program, and that caused a lot of borrowers to not be able to take advantage of the cancellation that they were promised. And so the waiver is an attempt to make sure that borrowers have access to be able to do just that, to get credit for all those years that they were unable to get credit for because of errors on the federal government side.

Mike Hydeck: So we can make it right for people who didn't get it done the first time plus more people can still apply, right? So who is eligible and how much can be forgiven?

Cristher Estrada Perez: Absolutely. So who is eligible? If you work for a public service sector, if you are a healthcare professional who works for a nonprofit hospital, if you're an educator, right, it depends where you work, at not necessarily what your title is. If you work for an education system, if you work for a school, you can be an educator, you can be a paraprofessional, right. Those folks are all eligible to apply for the Public Service Loan Forgiveness. Some borrowers are going to receive cancellation faster because they've already would have committed their 120 payments, or 10 years. So they might get a cancellation as soon as they process their application, and the government is able to process their application. Other borrowers are going to get their credits for the time that they're doing currently, the time that they've done in the past, and they're going to continue to build until they get to those 10 years or 120 payments. So we are urging actually everyone who works for public service, who works for nonprofits, government agencies, to really take advantage of the waiver and take space and time and also providing resources because we know that the process could be really long, it can be stressful, and borrowers don't always have places to turn to to answer their questions. And so we've created this campaign, this coalition of folks together to make sure that we spread the word, but also provide resources for those who are eligible.

Face the Facts

Face the Facts with NBC Connecticut goes beyond the headlines, asking newsmakers the tough questions, giving an in-depth analysis of the big stories.

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For more information on the Student Loan Fund, click here.

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