The Department of Education on April 19 announced changes estimated to move millions of people closer to clearing their student debt, and at least an estimated 40,000 borrowers will see their federal student debt immediately canceled.
Officials say the 40,000 borrowers under the Public Service Loan Forgiveness Program will see “immediate debt cancellation,” as part of the changes, according to a Tuesday news release from the Department of Education. PSLF cancels federal student loans for some public sector workers after 10 years of payments.
Several thousand additional borrowers will also see debt forgiveness through income-driven repayment programs. Income-driven repayment plans qualify for forgiveness after a borrower makes 20-25 years of payments.
“Student loans were never meant to be a life sentence, but it’s certainly felt that way for borrowers locked out of debt relief they’re eligible for,” Secretary of Education Miguel Cardona said in the statement.
The Department said it will take steps to end “forbearance steering,” in which a borrower is guided by loan servicers to choose forbearance to pause their federal student loan payments instead of other repayment plans.
“A borrower advised to choose forbearance – particularly long-term consecutive or serial uses of forbearance – can see their loan balance and monthly payments grow due to interest capitalization and lead to delinquency or default,” the department added.
