If you’re a public school teacher, you may be able to get your loans canceled with a new waiver | Education

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Some public school teachers in the New Orleans metro area have tens of thousands of dollars in student loan debt, but thanks to a temporary change to the rules of the Public Service Loan Forgiveness Program, many more may be eligible for the rebate.

In October, due to the pandemic, the Biden administration relaxed the terms of the program, allowing those with different types of loans or who paid using different payment plans to qualify for the discount. With the changes, past years of payments that would not have counted towards 10 years of service for borrowers now count, meaning many teachers could be much closer to receiving a full pardon.

“It’s incredibly generous to borrowers,” said Ryan Frailich, a charter school teacher turned financial advisor who led a webinar session on student loan forgiveness this week. “It’s taking people who otherwise were kicked out of the program, maybe applying and being told, ‘Sorry, you got the wrong kind of loan, go back and start doing 10 more years’ and saying “In fact, we’re going to give you all the credit. And we’ll cancel all your debt even if you technically didn’t follow the letter of the rules.

The problem? The waiver that expands the terms of debt cancellation will only remain in effect until Oct. 31, and New Schools for New Orleans, an education nonprofit, found that many educators ignored him.

What is Civil Service Loan Forgiveness?

The program allows teachers, government employees, nonprofit employees, and others to receive forgiveness of their federal student loans after 120 payments, or 10 years, while working in the public sector.

In the past, educators have had varying degrees of success in obtaining a pardon through the program, in part because of the strict requirements on the type of loans and payment plans. Generally, only direct federal loans paid using income-based repayment plans were eligible for the program, even if the debtors had worked in the public service for 10 years.

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New Schools for New Orleans has launched an outreach campaign to spread the word to teachers, hosting regular webinars for educators. The group surveyed 700 educators who participated in the webinars and found that about half had more than $50,000 in debt, with some as high as $100,000 or more, said Jahquille Ross, director of teacher support at the NSNO. Some public school teachers in New Orleans — where the average starting teacher salary is $43,564 and the overall average salary is $51,500 — owe more debt than they earn in a single year, a- he declared.

The NSNO estimated that New Orleans educators could receive $8 million in immediate loan forgiveness.

How does the renunciation change things?

To qualify for public service loan forgiveness, a person must have a direct federal loan, work for a nonprofit or government 501c3 job, and make 120 monthly payments on an income-based repayment plan. With the waiver, borrowers will get credit for any type of payment plan, different types of loans, and other factors that were previously excluded.

The waiver will end on October 31, and Frailich encouraged those who were previously rejected to apply again.

“It’s kind of like a ‘one time, we’ll give you credit for things that technically don’t follow the rules,’ but you have to act by October 31,” Ryan said.

Marie Fazio writes for The Times-Picayune | The New Orleans lawyer as a member of the Report For America body. Email her at [email protected] or follow her on Twitter @mariecfazio.

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