Bill aimed at accelerating student debt forgiveness through PSLF unveiled by House Dems
The proposal could dramatically accelerate student loan forgiveness for borrowers in the Public Service Loan Forgiveness (PSLF) program
Democrats in the House of Representatives unveiled a new bill on Wednesday that they said would make it easier for Americans with a career in public service to receive student loan forgiveness.
Rep. Joe Courtney, D-Conn., introduced the "Simplifying and Strengthening PSLF Act" in the House, which would make the recent changes to the Public Service Loan Forgiveness (PSLF) program permanent, as well as implement other reforms, according to a press release from his office. These changes would affect Americans with a career in public service such as teachers, police officers, firefighters and military service members.
Under the PSLF program, borrowers have had to commit to at least 10 years of public service work and make the 120 qualifying payments to their student loans over 10 years. But in October, the Biden administration announced temporary changes to the program.
Under the new rules, which were changed "for a limited time as a result of the COVID-19 national emergency," any prior payment made by a borrower eligible for the PSLF program would count as a qualifying payment. That's regardless of the loan type, repayment plan or whether the payment was made in full or on time. This temporary waiver is set to end on Oct. 31, 2022.
Along with making these changes permanent, the new bill would also significantly shorten the employment requirements and reduce the number of payments to 60 over 5 years.
"The Biden Administration put the Department of Education back on the side of students and hardworking American people – they made that clear when they overhauled PSLF last fall, and our new bill would make those improvements permanent," Courtney said in a statement. "PSLF was established to reward Americans who entered careers that our communities depend on, like teachers, nurses, firefighters, and police officers.
"October’s overhaul of PSLF was a big step in the right direction, and our new bill would codify those improvements along with an additional slate of upgrades to make it easier for America’s public service workers to qualify for, navigate and benefit from this patriotic program," Courtney continued.
If you have private student loans, you won't qualify for the PSLF program. But you can potentially reduce your monthly payment by refinancing. You can visit Credible to find your personalized interest rate without affecting your credit score.
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Congresswoman says student debt 'too damn high'
When announcing the bill, Adams said that students have too much debt and that even many who could qualify for PSLF are denied due to red tape requirements.
"The debt is too damn high, and that is why it is especially egregious that the federal government isn’t keeping its promises to public servants," Rep. Alma Adams, D-N.C said in a statement. "The Public Service Loan Forgiveness (PSLF) program was designed as an incentive for talented graduates to enter public service careers where they are desperately needed. Unfortunately, historically, 98% of applicants were denied loan forgiveness due to bureaucratic red tape.
"Our bill, the Simplifying and Strengthening PSLF Act, ensures we keep the promise to our public servants by codifying administrative fixes made by the Biden Administration," she said. "At a time when so many students and borrowers are awaiting debt relief, we must honor our promises."
Prior to Adams’ bill in the House, a companion bill was also introduced in the Senate by Sen. Sheldon Whitehouse, D-R.I.
If you have a private student loan and want to lower your monthly payments, you could consider refinancing. Visit Credible to compare multiple lenders at once and choose the one with the best interest rate for you.
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Biden considers canceling some student debt
President Joe Biden has said that he's considering canceling some student loan debt but has not yet given an official decision on when, or how much. He did, however, say that he will not cancel the $50,000 in student loan debt that some Democrats have called for.
"I am considering dealing with some debt reduction," Biden told reporters at the White House in May. "I am not considering a $50,000 debt reduction. I am in the process of taking a hard look at whether or not there will be additional debt forgiveness and I will have an answer on that in the next couple of weeks."
A recent survey from NPR/Ipsos said that over half of Americans, 55%, said they support forgiving up to $10,000 in federal student loan debt. But this support waned when the amount of debt increased, with just 47% of respondents saying they supported canceling up to $50,000 in student loan debt.
While the administration has not yet announced a decision on student loan debt cancelation, former White House press secretary Jen Psaki has said that Biden "would make a decision about any cancellation of student debt before the conclusion of that pause on student loans." Currently, student loan payments are paused until Aug. 31.
If you have private student loans, you will not be eligible for any potential debt forgiveness from the federal government. However, refinancing could help you lower your monthly payments. To see if this is the right option for you, contact Credible to speak to a student loan expert and get all of your questions answered.
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