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August 1, 2022

Coalition of AGs Urge the Biden Administration to Provide More Time and Opportunity for Borrowers to Achieve Loan Forgiveness

Chicago  — Attorney General Kwame Raoul co-led a coalition of 20 states in urging the Biden administration to extend and expand temporary changes to the Public Service Loan Forgiveness (PSLF) Program to provide borrowers with more opportunities to get closer to loan forgiveness faster.

Under the PSLF Program, remaining balances on federal Direct Loans are forgiven after borrowers – dedicated public servants such as teachers, firefighters, nurses and police officers – 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%. To restore the promise of PSLF, in October 2021, the U.S. Department of Education announced a temporary “Limited PSLF Waiver, which offers millions of qualifying public service workers the chance to have previously nonqualifying repayment periods counted toward loan forgiveness.

“Thousands of student loan borrowers dedicated themselves to public service with the assurance of loan forgiveness,” Raoul said. “I encourage the U.S. Department of Education to give these public servants more time to navigate this complicated waiver process, so they can access the relief they were promised.”

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

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

The U.S. Department of Education plans to conduct a one-time account adjustment later this fall that will count certain long-term forbearance periods toward forgiveness under PSLF. Raoul and 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 the waiver to be expanded to two categories of federal loan borrowers who are currently unfairly excluded from the waiver’s benefits: Parent PLUS borrowers and borrowers who obtained FFEL joint consolidation loans with spouses.

The letter, co-led by Illinois Attorney General Kwame Raoul and Massachusetts Attorney General Maura Healey, was joined by the attorneys general of California, Colorado, Connecticut, District of Columbia, Delaware, Hawaii, Iowa, Maryland, Michigan, Minnesota, North Carolina, New Jersey, New Mexico, New York, Oregon, Vermont, Washington and Wisconsin.

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