Public Service Loan Forgiveness waiver ends, however borrowers will still receive debt relief in the future

Key Takeaways

The U.S. Department of Education (ED) has announced new changes to the Public Service Loan Forgiveness Program (PSLF) following the October 31 expiration of the waiver that temporarily expanded eligibility for the program. The waiver, which was in effect for 12 months, sought to address the many challenges borrowers have historically faced in trying to meet the requirements for the PSLF program, which offers forgiveness for the remaining loan balances of full-time public and non-profit employees after 120 qualifying monthly payments. While ED is not extending all of the provisions available under the now-expired waiver, the actions—which include a one-time account adjustment slated to take effect in July 2023 as well as new, permanent regulations—should help more qualifying borrowers receive debt relief. County governments support reforms to the PSLF program to help us recruit and retain a talented workforce.

According to ED, more than 236,000 borrowers took advantage of the limited PSLF waiver to access $14 billion in forgiveness over the past year. To build on this expansion, ED has issued a final rule making changes to the program that include permitting borrowers to receive credit toward PSLF payments for late, partial and lump sum payments, awarding PSLF credit for time spent in periods of deferment due to special circumstances and simplifying the criteria for eligible employees to qualify as working full-time. Along with the rulemaking, ED has announced a one-time account adjustment intended to fix longstanding problems faced by borrowers receiving credit toward forgiveness under income-driven repayment (IDR) plans and PSLF. Both the rule and the account adjustment will take effect in July, 2023.

Additional details about forthcoming changes to PSLF and information about how to take advantage of these adjustments can be found in this fact sheet. NACo will monitor regulations around the PSLF program and broader student loan forgiveness efforts.

Additional Resources

• NACo Blog: Department of Education opens applications for federal student loan forgiveness
• NACo Blog: White House makes changes to student debt relief plan in anticipation of legal challenges
• NACo Blog: White House Announces Action on Federal Student Debt Relief for Certain Borrowers
• NACo Blog: White House Extends Freeze on Student Loan Payments Through August 31
• NACo Blog: The Limited PSLF Waiver: A Game Changer for County Employees
• NACo Report: Counties Support Post-Secondary Education and Workforce Opportunities for Residents