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Attorney General Josh Stein Calls for Public Service Loan Forgiveness Extension

For Immediate Release:
Monday, August 1, 2022

Nazneen Ahmed (919) 716-0060

(RALEIGH) Attorney General Josh Stein today urged the Biden Administration to extend and expand temporary changes to the Public Service Loan Forgiveness (PSLF) Program to provide certain borrowers with more opportunities to get loan forgiveness faster.

“Many North Carolinians who qualify for the Public Service Loan Forgiveness Program haven’t yet applied – because they’re too busy doing exactly what we asked them to,” said Attorney General Josh Stein. “They are hardworking teachers, law enforcement officers, firefighters, and other dedicated public servants who spend their days serving their communities. I am urging the Biden Administration to extend the waiver so that these folks can have the breathing room they need to fill out their paperwork. I also urge every eligible employer in our state to work with their employees to get this done – we must do everything we can to honor our commitment to these public servants.”

Under the PSLF Program, remaining balances on federal Direct Loans are forgiven after public servant borrowers make 120 qualifying payments while working full-time for a qualifying employer. However, due to the PSLF Program’s complexity and poor management, millions of public service workers have been unable to access forgiveness, and the program’s denial rates have been as high as 99 percent. To restore the promise of PSLF, in October 2021, the U.S. Department of Education announced a “Limited PSLF Waiver” which temporarily offers millions of qualifying public service workers the chance to have previously nonqualifying repayment periods counted toward loan forgiveness. The Department plans to conduct a one-time account adjustment later this fall that will count certain long-term forbearance periods toward forgiveness under PSLF.

In their letter sent to President Biden and Education Secretary Miguel Cardona, the attorneys general request an extension of the Limited PSLF Waiver’s deadline of October 31, 2022, noting that many borrowers remain unaware of or confused by the waiver, and that an extension is necessary to enable borrowers to get the information and help they need to secure critical waiver benefits.

The letter also cautions against ending the waiver just two months after the federal loan portfolio is scheduled to resume repayment and amidst an ongoing transfer to a new PSLF servicer. Further, the letter expresses concerns over subjecting borrowers to repeated PSLF rule changes over a relatively short period of time.

The attorneys general also argue that the waiver should automatically count all forbearance periods toward loan forgiveness and be made available to all federal loan borrowers to address pervasive servicer misconduct and resulting missed opportunities to make qualifying payments. In addition, the attorneys general advocate for equal treatment for all federal loan borrowers by recommending that waiver benefits be expanded to include all Parent PLUS borrowers and borrowers who obtained FFEL joint consolidation loans with spouses.

Attorney General Stein was joined in sending this letter by Attorneys General of California, Colorado, Connecticut, District of Columbia, Delaware, Hawaii, Illinois, Iowa, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New Mexico, New York, Oregon, Vermont, Washington, and Wisconsin.

A copy of the letter is available here.


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