Fixing the Loan Forgiveness Program

The Department of Education is working on a new plan to help make people aware of loan forgiveness for student loans for those who choose certain professions.

According to a piece today on the Department’s blog:

Under Secretary of Education Martha Kanter joined Congressman John Sarbanes (D-Md.)… to announce new efforts from the Department of Education to help public servants—including veterans, nurses, and teachers—take advantage of Public Service Loan Forgiveness (PSLF). Public Service Loan Forgiveness cancels the balance of a borrower’s federal student loan debt after they have served full time in a public service role for at least 10 years, while making on-time qualifying loan payments each month.

The new materials from ED include an employment certification form that allows borrowers to keep track of eligible employment and payments. This form will help those borrowers who have made a service commitment to this country while honoring their responsibility to repay their federal student loans and allow them to more easily receive loan forgiveness when they are able. In addition, these new materials will allow borrowers to find out now if their job and loan payments will qualify them for loan forgiveness in the future as well as how many payments they have left to make – information that is not currently available.

It’s probably not that big a change—the loan forgiveness plan covers no more professions, it just provides more information about existing provisions—but it’s probably a step in the right direction.

One of the biggest problems people have in paying student loans, aside from finding the money itself, is the difficulty in tracking and understanding what they owe, when it’s due, and what policies are available to help them reduce payments. This at least helps people figure out what they can do to avoid paying too much.

Daniel Luzer

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer