June 05, 2018
Eligibility for Public Service Loan Forgiveness Expanded
The U.S. Department of Education announced that it will expand Public Service Loan Forgiveness (PSLF) to borrowers enrolled in previously ineligible repayment plans. The $350 million program, called Temporary Expanded PSLF (TEPSLF), will serve borrowers on a first-come, first-served basis and expire when the funds have been exhausted.
Currently, borrowers enrolled in the Income-Based Repayment (IBR), Income-Contingent Repayment (ICR), Pay As You Earn (PAYE), and Revised Pay As You Earn (REPAYE) plans have been eligible for loan forgiveness under PSLF. Under the expanded program, borrowers enrolled in the Graduated Repayment Plan, Extended Repayment Plan, Consolidated Standard Repayment Plan, and Consolidated Graduated Repayment Plan will now qualify for loan forgiveness if they have met the monthly payment and public service employment criteria.
Previously, borrowers enrolled in those programs would have had their PSLF applications denied by the Department of Education. There is no known estimate of the number of borrowers who had previously been denied PSLF due to enrollment in a non-qualifying loan repayment plan nor how many borrowers could qualify for the expanded program.
Congressional appropriators created the $350 million funding stream as part of the Consolidated Appropriations Act of 2018, which also included significant increases in the federal student aid programs. Despite the bipartisan support for PSLF, the program has recently been targeted for elimination by President Trump in his proposed budgets for both FY2018 and FY2019, and by House Republicans in their version of the reauthorization of the Higher Education Act, dubbed the PROSPER Act.
The U.S. Department of Education has created a website to answer frequently asked questions and provide additional guidance on TEPSLF. Given the first-come, first-served nature of this temporary extension of benefits, institutions should make this information known and available to graduates.
Currently, borrowers enrolled in the Income-Based Repayment (IBR), Income-Contingent Repayment (ICR), Pay As You Earn (PAYE), and Revised Pay As You Earn (REPAYE) plans have been eligible for loan forgiveness under PSLF. Under the expanded program, borrowers enrolled in the Graduated Repayment Plan, Extended Repayment Plan, Consolidated Standard Repayment Plan, and Consolidated Graduated Repayment Plan will now qualify for loan forgiveness if they have met the monthly payment and public service employment criteria.
Previously, borrowers enrolled in those programs would have had their PSLF applications denied by the Department of Education. There is no known estimate of the number of borrowers who had previously been denied PSLF due to enrollment in a non-qualifying loan repayment plan nor how many borrowers could qualify for the expanded program.
Congressional appropriators created the $350 million funding stream as part of the Consolidated Appropriations Act of 2018, which also included significant increases in the federal student aid programs. Despite the bipartisan support for PSLF, the program has recently been targeted for elimination by President Trump in his proposed budgets for both FY2018 and FY2019, and by House Republicans in their version of the reauthorization of the Higher Education Act, dubbed the PROSPER Act.
The U.S. Department of Education has created a website to answer frequently asked questions and provide additional guidance on TEPSLF. Given the first-come, first-served nature of this temporary extension of benefits, institutions should make this information known and available to graduates.