Congressional Fix for Public Service Loan Forgiveness Program

The FY18 Omnibus Appropriations bill provides a grace period for individuals who mistakenly believed they were enrolled in the Public Service Loan Forgiveness Program to switch to a student loan repayment plan that will allow them to participate.

Public Service Loan Forgiveness Program (PSLF)The Fiscal Year (FY) 2018 Omnibus Appropriations bill recently passed by Congress, and now enacted into law, not only provided funding for the Public Service Loan Forgiveness (PSLF) Program, which the administration asked to eliminate, but also included NTEU-supported language that provides a way for those consumers who belatedly found themselves in the wrong student loan repayment plan to switch to one that will allow them to continue on the path to loan forgiveness. 

Cost of educationDue to the lack of information provided by the Department of Education and their contractors about the PSLF Program, many NTEU members have found that after they applied for the program and made years of timely payments, their payments did not qualify for the loan forgiveness and there was no way offered to fix the mistake. The FY18 Omnibus Appropriations bill establishes a $350 million fund to address this issue.  However, it does have some qualifying rules. For instance, to have your ineligible payments counted toward loan forgiveness, your most recent monthly payment and the one made a year before applying for forgiveness must be as much as you would have paid in a correct plan.

Seal of the United States of America Department of EducationUnder the bill, the Education Department must reach out to borrowers and develop a simple way for them to apply for the fix. The Department is now working on forms and regulations to implement the change. Applications will be available approximately 60 days from enactment of the bill (around May 24). However, there is some question about whether the amount provided will be enough to cover everyone affected. The money will be distributed on a first come, first served basis. As of today, there is no information about this new program on the PSLF Program page at the Department of Education web site. If you are an affected individual, you should contact your lender and the Student Aid office at the Department of Education.

We will provide updates as they become available.