NAICU Washington Update

New Details Emerge Regarding Public Service Loan Forgiveness

October 28, 2022

The Department of Education continues to make regular announcements expanding various aspects of its loan forgiveness programs.  Earlier this week, it announced that it is clarifying how past payments made under an Income-Driven Repayment (IDR) plan will count as credited toward both IDR forgiveness and Public Service Loan Forgiveness (PSLF) for any months in which a borrower has a certified qualifying employment on loans borrowed as a student. 

Borrowers with eligible loans do not need to apply for this credit, it will be automatically computed by the Department in July 2023. Borrowers who do not have eligible loans will need to apply for consolidation no later than May 1, 2023, to ensure they benefit from the one-time account adjustment.

The Department also released a fact sheet detailing the permanent improvements to the PSLF program through updated regulations, which will be published by November 1. These regulations were negotiated in the Affordability and Student Loan Committee during the negotiated rulemaking session in 2021, and eliminate many unnecessary barriers to obtaining PSLF credit, helping many more borrowers working in public service reach forgiveness in the future.

Earlier this year, the Department announced it will be conducting a one-time account adjustment next summer for borrowers with federal direct loans and Federal Family Education Loans held by the agency. This one-time account adjustment will fix longstanding problems faced by borrowers receiving credit toward forgiveness under the IDR plans and PSLF. 

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