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HOW FACT SHEET: PUBLIC SERVICE LOAN FORGIVENESS (PSLF) PROGRAM OVERHAUL, ESTABLISHMENT OF ENFORCEMENT OFFICE (673 hits)


For Immediate Release From USDE!


The Public Service Loan Forgiveness (PSLF) Program is an important—but largely unmet—promise to provide debt relief to support the teachers, nurses, firefighters, and others serving their communities through hard work that is essential to our country’s success. By cancelling loans after 10 years of public service, PSLF removes the burden of student debt on public servants, makes it possible for many borrowers to stay in their jobs, and entices others to work in high-need fields.

Today, the Department of Education is announcing a set of actions that, over the coming months, will restore the promise of PSLF. We will offer a time-limited waiver so that student borrowers can count payments from all federal loan programs or repayment plans toward forgiveness. This includes loan types and payment plans that were not previously eligible. We will pursue opportunities to automate PSLF eligibility, give borrowers a way to get errors corrected, and make it easier for members of the military to get credit toward forgiveness while they serve. We will pair these changes with an expanded communications campaign to make sure affected borrowers learn about these opportunities and encourage them to apply.

These changes are important steps toward a better and stronger PSLF program, one that will move away from the current situation in which too few borrowers receive forgiveness, and too many do not receive credit for years of payments they made because of complicated eligibility rules, servicing errors or other technicalities. The Department is also working to identify further improvements to ensure public servants get the relief they deserve, including partnerships with employers and revising regulations. These actions are informed by the more than 48,000 comments the Department received on a request for information on improving PSLF issued over the summer.

The Department estimates that the limited waiver alone will help over 550,000 borrowers who had previously consolidated their loans see their progress toward PSLF grow automatically, with the average borrower receiving 23 additional payments. This includes approximately 22,000 borrowers who will be immediately eligible to have their federal student loans discharged without further action on their part, totaling $1.74 billion in forgiveness. Another 27,000 borrowers could potentially qualify for $2.82 billion in forgiveness if they certify additional periods of employment. For reference, just over 16,000 borrowers have ever received forgiveness under PSLF prior to this action. We anticipate that many more will also receive additional credit as we implement other changes over time, such as counting previously ineligible payments that were not affected by a loan consolidation.

The COVID-19 pandemic has placed a tremendous strain on public servants, making it even more critical that borrowers are able to access PSLF. Many public servants have been on the front lines of the pandemic, making personal sacrifices to keep the rest of us safe. Nonprofits are still recovering jobs lost in the last year, and some public service workers have reported they are considering leaving public service altogether. Frontline sectors like teaching and healthcare are already seeing burnout and employee shortages. Alleviating some of the financial strain associated with student debt can help borrowers in these sectors as they continue to navigate the fallout of this pandemic.

Today the Department is announcing it will:

Implement a Limited PSLF Waiver to count all prior payments made by student borrowers toward PSLF, regardless of loan program. The Department will be offering a temporary opportunity to give borrowers credit for prior payments they made that would not otherwise count toward PSLF. Any prior payments made while working for a qualifying employer will count as a qualifying payment, regardless of loan type or repayment plan.

This Limited PSLF Waiver will apply to borrowers with Direct Loans, those who have already consolidated into the Direct Loan Program, and those with other types of federal student loans who submit a consolidation application into the Direct Loan Program while the waiver is in effect. The waiver applies to loans taken out by students.

The waiver will run through October 31, 2022. That means borrowers who need to consolidate will have to submit a consolidation application by that date. Similarly, borrowers will need to submit a PSLF form—the single application used for a review of employment certification, payment counts, and processing of forgiveness—on or before October 31, 2022 to have previously ineligible payments counted. The Department recommends borrowers take this action through the online PSLF Help Tool, which is available at StudentAid.gov/PSLF.

Counting prior payments on additional types of loans will be particularly important for borrowers who have or had loans from the Federal Family Education Loan (FFEL) Program. Around 60 percent of borrowers who have certified employment for PSLF fall into this category. Many FFEL borrowers report receiving inaccurate information from their servicers about how to make progress toward PSLF, and a recent report by the Consumer Financial Protection Bureau (CFPB) revealed that some FFEL servicers have systematically misled borrowers on accessing PSLF. Counting payments made on FFEL loans toward PSLF will correct these issues and help address the effects of the COVID-19 pandemic on student loan borrowers. Payments prior to a Direct Loan consolidation are also covered by this waiver, so it will benefit those who consolidated their Direct Loans and lost progress toward PSLF as a result.

The Department will start automatically adjusting payment counts for borrowers who have already consolidated their loans into the Direct Loan Program and certified some employment for PSLF, and those borrowers can expect to see these adjustments in their accounts in the coming months. Borrowers who have loans from the FFEL or Federal Perkins Loan programs will also have this waiver applied automatically, but only after they have consolidated and submitted a PSLF form, and all paperwork has been processed.

Simplify what it means for a payment to qualify for PSLF. The Limited PSLF Waiver also addresses another concern we have heard from borrowers—that too many payments do not count toward PSLF due to technical requirements around borrowers’ choice of payment plan, timing, and amount of the payment. In some instances, borrowers missed out on credit toward PSLF because their payments were off by a penny or two or late by only a few days.

The Department will automatically adjust PSLF payment counts for payments made on or before October 31, 2021 for borrowers affected by this issue who have already certified some employment for PSLF. Borrowers who have not yet applied for PSLF forgiveness or certified employment but do so by October 31, 2022 will benefit from these temporary rules as well.

Eliminate barriers for military service members to receive PSLF. The Department will allow months spent on active duty to count toward PSLF, even if the service member’s loans were on a deferment or forbearance rather than in active repayment. This change addresses one major challenge service members face in accessing PSLF. Service members on active duty can qualify for student loan deferments and forbearances that help.

Read and learn more HERE!: https://www.ed.gov/news/press-releases/fact-sheet-public-service-loan-forgiveness-pslf-program-overhaul?utm_content=&utm_medium=email&utm_name=&utm_source=govdelivery&utm_term=


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Today, the U.S. Department of Education announced the establishment of an Office of Enforcement within Federal Student Aid, reporting directly to the chief operating officer. The Office of Enforcement will strengthen oversight of and enforcement actions against postsecondary schools that participate in the federal student loan, grant, and work-study programs. Today's action restores an office that was first established in 2016, but deprioritized in the previous administration.

"Vigorously ensuring that schools are adhering to the federal student aid program rules and delivering quality education to students is critical in America's ability to build back better," said Under Secretary James Kvaal. "The Administration will prioritize Federal Student Aid's effective oversight and enforcement of postsecondary schools."

The Enforcement Office will be led by Kristen Donoghue, as the chief enforcement officer, who will report directly to FSA Chief Operating Officer Richard Cordray. Donoghue joined FSA in July as a senior advisor to the chief operating officer, bringing a wealth of enforcement and leadership experience. Donoghue previously served as the enforcement director of the Consumer Financial Protection Bureau (CFPB), where she led a 140-person office responsible for enforcement of federal consumer financial laws covering a range of financial services companies including the largest banks in the country.

Under her leadership, the CFPB pursued hundreds of investigations and filed numerous significant public enforcement actions, including obtaining the highest civil money penalty in the CFPB's history, a $1 billion fine against Wells Fargo. Most recently, Donoghue served as a managing vice president at Capital One Bank, where she headed a team focused on legal and regulatory compliance.

"Kristen brings a strong enforcement track record to this role," said Chief Operating Officer Richard Cordray. "Her experienced leadership will drive greater accountability for schools and better educational outcomes for the students we serve."

The Enforcement Office will proactively identify and address major problems across institutions that pose widespread risks to students and taxpayers. The office will work closely with the Partner Participation and Oversight Office on a risk-based approach to oversight and compliance. It will comprise four existing divisions:

Administrative Actions and Appeals Services Group: This group fines, limits, suspends, terminates, and imposes emergency actions against postsecondary institutions that participate in the federal student aid programs. The group also issues actions, such

Read and learn more HERE!: https://www.ed.gov/news/press-releases/us-department-education-establish-enforcement-office-within-federal-student-aid?utm_content=&utm_medium=email&utm_name=&utm_source=govdelivery&utm_term=
Posted By: agnes levine
Friday, October 8th 2021 at 3:07PM
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