Do you work in a school or a non-profit organization? You could erase student loans


NEW YORK (AP) — When Melissa Martinez applied for forgiveness of her student loan debt more than a decade ago, the U.S. Department of Education told her she wasn’t eligible.

Martinez, a professor, tried again last year and managed to clear the last $6,000 she owed for her doctorate. She wasn’t alone – according to new federal figures, more than 145,000 borrowers have had the rest of their federal student debt forgiven thanks to a program for people who work for schools, governments or non-profit organizations. non-profit.

Hundreds of thousands more have completed the paperwork for the civil service loan forgiveness scheme, and officials say many more are likely to qualify. The October 31 deadline to apply under the less stringent rules is fast approaching.

There’s a larger conversation going on in America about how to deal with student loan debt. An estimated 43 million Americans have student loans worth $1.6 trillion, according to federal figures. Federal student loan payments have been suspended during the coronavirus pandemic and will remain so until at least August 31. President Joe Biden is expected to make some sort of announcement on student loan relief by then.

Almost all of the cancellations under the civil service loan forgiveness program have come since last October, when the government temporarily eased complex requirements. Prior to that, the program had rejected more than 90% of applicants, the Department of Education said in 2019.

A spokesman for the Department of Education said Wednesday that most borrowers who were denied then were deemed ineligible because they did not meet the eligibility requirements of the employer, that their dates of employment did not match the dates of their student loans or that they did not have the necessary direct loans.

“I thought maybe it would work now,” said Martinez, who graduated from the University of Texas at Austin in 2010 with a doctorate in educational administration.

Martinez said the money will be used to reduce credit card debt and build savings to have for emergencies and unexpected expenses.

“Knowing it’s forgiven takes some of the worry or stress off my shoulders,” she said.

Even though the deadline is in October, Martinez advises people who might qualify for loan forgiveness to apply as soon as possible. She found the process difficult to navigate, even with the relaxed rules. It took him five months to complete the paperwork and another three months to hear from the program.

“I remember calling and being on the line for an hour on hold,” she said. Martinez was also initially denied her proof of employment, although it was approved when she returned the documents.

The Public Service Loan Forgiveness Program, launched in 2007 to steer more graduates into public service, forgives federal student loan debt after 10 years of community service, or 120 payments. Teachers, librarians, nurses, public interest lawyers, the military, and other public workers are all eligible, as well as people who work for nonprofit organizations.

So far, the forgiveness totals nearly $8.1 billion in federal loans, but that amount represents only a fraction of the debt that could qualify. The average amount of debt canceled under the program is $64,968.

“The program sounds really simple – people pledge ten years to serve their country and their communities, and the government promises to end their student debt,” said Kat Welbeck, civil rights adviser at the Student Borrower Protection Center. “We have seen, throughout the 14 years, so many people held back by barriers and administrative burdens, not knowing they had access to this program or being told they could not access it even though they were working in a skilled job.”

Under the reformed rules, loan servicers book payments that were previously deemed unacceptable, for example when borrowers mistakenly or unwittingly signed up for ineligible plans.

“I think it’s a great incentive, especially for teachers. So many people are overworked and underpaid, and they have these loans that they’re still working on,” Martinez said.

The waiver period was life-changing for loan holders who were able to receive credit for forgiveness during years of working in public service after being rejected before, Welbeck said, describing tears of joy as the loan balances fell to zero.

“There are so many more people to reach,” Welbeck added. “And it’s only been a year, so we’re operating with a sense of urgency.”

Martinez encourages others to apply during the waiver period, despite the frustration. She says it was worth the time and effort to get her student loan balance forgiven.

Borrowers who are currently unemployed or not working in the civil service can still qualify for a discount, according to the Ministry of Education. And pandemic months since March 2020 in which payments on federal loans were suspended count as credits toward the total number of payments required for the program.

The Biden administration on Wednesday proposed new rules for the program that are expected to go into effect by July 2023. They would give borrowers more leeway if they fall behind or don’t pay in full.

Under the original rules, borrowers must make payments in full within 15 days of the due date to get credit for their 120 monthly payments. The proposal would relax this, allowing borrowers to progress even if they are late or to make payment in installments.

The waiver, which expires Oct. 31, was primarily intended to offset widespread confusion about the types of loans and payment plans eligible under the program. Some borrowers had made years of payments only to find they weren’t part of a qualifying loan plan or program.

The proposed new rules won’t change which loans qualify, but they aim to provide more flexibility so borrowers don’t lose progress toward forgiveness due to late payments or paperwork issues.


Associated Press writer Collin Binkley contributed to this report.


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