$819M in student debt erased for Californians under forgiveness program: Do you qualify?

As borrowers await a decision from President Biden on federal student loan debt, many are having their debt erased under a temporary waiver for an already-in-place forgiveness program. That includes thousands of Californians, according to newly released data.

U.S. education officials have been encouraging borrowers to consider applying for loan relief under the Public Service Loan Forgiveness program before the waiver comes to an end.

The program, commonly known as PSLF, is intended to help certain borrowers working in the public sector by forgiving their federal student loans after 120 payments over 10 years. The number of applicants actually having their loans forgiven has been low – just 1 in 5 of the 1.3 million borrowers pursuing debt discharge through PSLF are on track to see relief by 2026, according to a September report by the Student Borrower Protection Center.

Last year, the Education Department rolled out a waiver on specific PSLF requirements to grant borrowers credit toward loan cancellation regardless of their federal loan type or if they had been enrolled in a specific payment plan, as long as they consolidated their debt into a Direct Loan before the end of the waiver.

Since the waiver took effect, over 14,000 borrowers in California have had more than $819 million in student debt erased under the PSLF waiver, Richard Cordray, the head of Federal Student Aid, shared Tuesday. On average, that equates to more than $58,000 per borrower.

You have less than three months to determine if you qualify under the PSLF waiver, which is currently set to expire after Oct. 31, 2022. Here’s how to do it.

PSLF qualifications

As explained above, PSLF is intended to give eligible public service employees debt forgiveness after a set number of payments are made.

Eligible borrowers must:

• Be employed by a U.S. federal, state, local, or tribal government or not-for-profit organization (federal service includes U.S. military service)
• Work full-time for that agency or organization
• Have Direct Loans (or consolidate other federal student loans into a Direct Loan)
• Make 120 qualifying payments

Under the current PSLF waiver, eligible borrowers can receive credit for payments made on other loan types, under any payment plan, before consolidation, or after the due date. Those who received Teacher Loan Forgiveness can apply the period of service that led to their eligibility toward PSLF, if they can certify PSLF employment for that period.

How to determine if you qualify for PSLF

First, you’ll want to visit the FSA’s website and log into your account. You’ll be able to search your employer within the FSA’s database and add information about your employment. Once you find your employer, you’ll be able to see whether it qualifies under PSLF.

Next, according to SBPC’s walkthrough guide, you’ll want to determine which type of federal student loans you have. Direct Loans are eligible for PSLF while other loans need to be consolidated into a Direct Consolidation Loan. Until the end of October 2022, previous qualifying payments you’ve made on a non-Direct Loan will count for the necessary 120 payments PSLF requires for forgiveness.

Once you’ve completed the steps above, you’ll need to confirm your employment. You should then be able to submit your PSLF form.

The FSA has created a help tool to guide borrowers through completing the form.

Who qualifies for the already-approved student loan forgiveness?

Roughly 1.3 million borrowers nationwide have seen $26 billion in student debt forgiveness since President Biden took office.

In addition to the thousands of borrowers that have received debt cancellation under the revamped PSLF program, another 690,000 borrowers have had a total of $7.9 billion in student loans erased through discharges due to borrower defense and school closures. Over 400,000 borrowers have received more than $8.5 billion in debt forgiveness through total and permanent disability discharge.

Biden is expected to announce his plans regarding more widespread student debt forgiveness and possibly an extension to the loan payment pause in the coming weeks.