COLORADO SPRINGS — More than 550,000 student loan borrowers could soon see relief.
The US Department of Education announced major changes Wednesday to a federal student loan forgiveness program for borrowers working in government and nonprofit sectors.
The Public Service Loan Forgiveness program was created in 2007 to help forgive outstanding federal student loan debt for qualifying public-sector workers after they have made monthly payments for 10 years. But it fell short of its pledge, prompting these changes to the program.
"I'm really excited, I've put in a lot of hours in the classroom, and I feel like it is going to be great," said Cari Fox, President of the Academy Education Association and Challenger Middle School teacher.
Fox is among the roughly ninety percent of student borrowers who are denied for the program.
"I was denied because I wasn't paying the correct amount. They wanted me to pay $19 more a month for another 120 payments. I did the math and if I was to do that, I would have already paid off my loan so opted to not change and keep paying what I had been paying," said Fox.
With the overhaul of the program, she plans to re-apply.
"I'm going to make that switch, I'm going to have that paid off, and it's one less debt, and it's my biggest one," said Fox.
Pikes Peak Community College Financial Aid Director Ron Swartwood says other borrowers have experienced similar challenges with the program.
"If they weren't in the right loan repayment program. They had to have been in an income-driven repayment program such as the income-based repayment plan, income-contingent, or pay-as-you-earn repayment plan. If they weren't in any of those, their payments didn't count. If they didn't have all direct student loans such as the old Federal Family Educational Loans, those wouldn't count. If they made extra payments if they didn't count, if they were off a day or two on the due date, they didn't count," said Swartwood.
Under the eased requirements, the education department will offer a limited waiver that will finally allow borrowers to make sufficient headway in paying off their loans.
"Some of the rules still apply, still have to be in public service and make 120 payments, but they are going to relax the rules on the types of loans that people have, automatically go back and re-look at the repayments that they've made, the places that they've worked. They are going to loosen a lot of the rules for them," said Swartwood.
To accomplish what the program was intended to do.
"It is such a perk with teachers, and right now we need perks because we are losing teachers left and right because of the teacher shortage," said Fox.
The waiver will continue through October 31, 2022. To find out more information on the program, visit studentaid.gov.