October 7, 2021
A federal loan forgiveness program known for its ineffectiveness will undergo major reforms over the next year, the Department of Education announced Wednesday. The overhaul is intended to fulfill a “largely unmet” promise to wipe away the student debt of teachers, military service members and others working in the public sector.
Most of the changes are temporary. But the department estimates that as a result of the reforms, 22,000 borrowers will have $1.74 billion in loans discharged immediately, and over half a million borrowers will see their progress toward loan forgiveness increase automatically.
Only 2 percent of the applications processed have met the requirements for loan forgiveness under the Public Service Loan Forgiveness (PSLF) program, which is intended to provide student borrowers with a discharge of their loans in exchange for a decade of work at a government or not-for-profit employer.