(WIVB) – The Biden administration has made changes to student loan forgiveness program that was not making the grade.
But those changes are only temporary.
The public service loan forgiveness program was getting terrible grades from the government because it was failing college graduates it was supposed to be helping, so the U.S. education department made some changes to give former students some extra credit.
Noelle Carter, president of Consumer Credit Counseling Service told News 4 that the student loan forgiveness program has such an abysmal record because it was incredibly complex in its requirements.
The program was designed to reward students who chose public service jobs after graduation – 10 years of on-time loan payments, and the balance of their debt would be wiped out.
“Lo and behold, 10 years later people go and qualify – or think that their loans are going to be forgiven – and 99 percent of the loan applications were denied,” Carter said.
Carter said qualifying for loan forgiveness is a complicated process so the U.S. Department of Education is offering a half million former students who have been rejected a limited time to re-apply and get into the program.
So far it seems to be working.
Teacher Debbie Baker borrowed $35,000 for her college studies in 1999, but after 10 years of on-time payments her balance more than doubled after she was rejected for the forgiveness program.
Baker re-applied following the new guidelines, and the entire debt has been wiped out.
“It’s mind-boggling, just the stress and anxiety that has been lifted,” Baker said.
Active service members who have felt the sting of rejection are also getting help through the changes.
College loan payments are deferred while military personnel are serving their country, so they were not counted toward forgiveness, because all public service jobs were considered the same.
“So you could be a teacher, you could be a service member,” Carter said. “It is just over all, the requirement of the program, or a rule of the program was, months of deferment don’t count towards months of forgiveness.”
Consumer Credit Counseling Service can guide public service workers through the application process for loan forgiveness, for a nominal fee.
The re-tooled forgiveness program wraps up on October 31, 2022, but the final bell rings for some of the other relief programs, a lot sooner.
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