Student Loan Forgiveness Program Receives New Life With $350 Million Concession
The recent $3.1 trillion federal spending bill includes $350 million for student loan forgiveness.
U.S. student loan borrowers who labor in public service jobs may receive assistance from a one-time $350 million federal program expansion. With this expansion, teachers, nurses, and other public service employees might see some forgiveness of their student loan debt.
The expansion was recently signed by President Donald Trump as a concession in the country’s $3.1 trillion spending bill.
What This Means for Borrowers
This measure might provide some much-needed relief for borrowers who don’t earn much in the public service sector. Because of entry-level wages and fairly high student loan debt, they can struggle to obtain a mortgage, support a family, or even make enough money to live on.
“I’m very glad that, for the first time, we got some money to help public servants unfairly trapped under a mountain of debt,” said Sen. Elizabeth Warren (D-Mass.).
Warren was one of the politicians who sought the relief. Although she was pleased to learn of the relief, she said this temporary measure isn’t the permanent solution that is needed, considering the more than $1.4 trillion in student loan debt that is owed in the U.S.
How Borrowers Can Qualify
In order to qualify for the student loan forgiveness program, which was first established in 2007, those who are working in the public service sector had to first make a total of 120 payments. Every payment had to reach the student loan servicer on time. In addition, they had to be working for a qualifying employer.
On top of that, the loans had to come from the federal government. The requirement that the loans come from the federal government is one of the stipulations that can ruin an unsuspecting borrower’s chances of loan forgiveness.
It can take months for borrowers to get approved for loan forgiveness because of how long it takes for the government to look into the lengthy payment history and employment records for each applicant. During the time the government is deciding upon their case, the borrowers must continue to make payments.
It can be tricky for borrowers to determine if they qualify for student loan forgiveness. The best ways to find out if they are eligible is for borrowers to ask their loan servicer or check out the conditions online.
But there have been many reports of borrowers being given misleading or incorrect information by student loan servicers. Thousands of students erred when they selected a repayment program, which may have impacted their chances to qualify for loan forgiveness. And millions of other borrowers chose loans that didn’t meet eligibility requirements for the program.
Those who have learned they aren’t able to pursue debt forgiveness may still be helped by this temporary Band-Aid until the $350 million runs out. The relief may also help borrowers who were previously eligible but who feel they were misled about their options.