Attorney General Bonta: Biden Administration's Sweeping Overhaul of Public Service Loan Forgiveness Program Achieves Goals of Lawsuit

With nation's public servants finally on track to get the student loan relief they deserve, Attorney General Bonta files stipulated notice of dismissal  

OAKLAND – California Attorney General Rob Bonta today announced that the Biden Administration’s actions to fix the broken Public Service Loan Forgiveness (PSLF) and Temporary Expanded Public Service Loan Forgiveness (TEPSLF) programs have achieved the goals of litigation filed by the California Department of Justice (DOJ) in June 2020 and warrant dismissal of the lawsuit. The lawsuit sought to compel the U.S. Department of Education (ED) to comply with implementation requirements for the TEPSLF program after nearly all of the public servants who applied for student loan forgiveness had their applications denied. As a result of the lawsuit and the advocacy of state attorneys general and others, ED announced a sweeping overhaul of the PSLF and TEPSLF programs and made a public commitment to ensuring eligible public servants get the student loan forgiveness that they deserve. With the goals of the lawsuit met, Attorney General Bonta today filed a stipulated notice of dismissal and urged Californians to take advantage of ED's limited-time Public Service Loan Forgiveness Limited Waiver Opportunity to receive credit for past payments made on loans that would otherwise not qualify under the PSLF program.

“Across the country, millions of Americans took out student loans to become public servants, our teachers, our firefighters, and our nurses with the promise of debt relief down the line,” said Attorney General Bonta. “As a student borrower myself, I know what it’s like to get that monthly payment reminder and to feel the crushing weight of writing out a three- or even four-digit check each month. My office has a long history of protecting students and fighting for borrowers, so when we saw the broken promise of student loan relief for public servants who did everything right, we acted. Now, with our nation’s dedicated public servants finally on track to get the student loan relief they are entitled to, we are closing the chapter on this litigation. We’ve seen the Biden Administration's commitment to overhauling the PSLF and TEPSLF programs, and we look forward to continuing to work with them in the days and months ahead to ensure every eligible Californian gets the relief they are entitled to.”

A bipartisan Congress created the PSLF program in 2007 to encourage students to enter qualifying public service jobs — like school teachers, EMTs, and service members — in return for forgiving the remaining balance of their federal student loans after ten years of on-time loan payments. When the first wave of borrowers applied for loan forgiveness in 2017, ED denied applicants at the alarming rate of 99 percent. In 2018, a bipartisan Congress gave ED a second chance to deliver on PSLF’s critical promise by creating TEPSLF. In doing so, Congress gave ED clear instructions to simplify and expand the program in order to increase the rate of loan forgiveness. However, ED continued to mismanage the program, denying TEPSLF applicants at nearly the same rate as PSLF applicants. 

In June 2020, DOJ filed a lawsuit alleging that ED’s failure to implement the TEPSLF program violated the Administrative Procedure Act. After the filing of the lawsuit, ED began taking steps to improve administration of the PSLF and TEPSLF programs. ED’s efforts to improve the program meet, and in some cases, surpass, the changes requested by DOJ. These included consolidation of the PSLF/TEPSLF applications and employment certification form into one form, expansion of qualifying payments, and the launch of a PSLF Help Tool to assist public service borrowers. More recently, ED announced a sweeping overhaul of the PSLF and TEPSLF programs, including a limited-time Public Service Loan Forgiveness Limited Waiver Opportunity that will run through Oct. 31, 2022, that brings eligible public servants closer to securing the student loan forgiveness that they deserve.

How to Check if Your Payments are Eligible Under the Limited PSLF Waiver

Under the temporary program rules, any prior payment made will count as a qualifying payment, regardless of loan type, repayment plan, or whether the payment was made in full or on time. All you need is qualifying employment. This temporary change applies to student loan borrowers with Direct Loans, those who have already consolidated into the Direct Loan Program, and those who consolidate into the Direct Loan Program by Oct. 31, 2022.

There are two requirements in order to receive additional qualifying payments:

• Full-time employment: You must have worked full-time for a qualifying employer when prior payments were made. If you were employed in more than one qualifying part-time job at the same time, you will be considered full-time if you worked a combined average of at least 30 hours per week. You can receive credit only for payments made after Oct. 1, 2007, since that is when the PSLF program began. If you haven’t already, you must file a Public Service Loan Forgiveness (PSLF) & Temporary Expanded PSLF (TEPSLF) Certification & Application (PSLF form) for any period for which you may receive additional qualifying payments.
• Loan consolidation: If you have Federal Family Education Loan (FFEL) Program loans, Federal Perkins Loans, or other types of federal student loans that are not Direct Loans, you must consolidate those loans into the Direct Loan program by Oct. 31, 2022.

How to Utilize the Limited PSLF Waiver

• You have Direct Loans and you’ve already had some PSLF employment certified: If you’ve already applied for PSLF and had at least some employment certified, ED will award any additional payments without further action from you. If necessary, Federal Student Aid may contact you to ask you to certify additional months of employment. You should look out for an email from Federal Student Aid in the coming weeks to let you know how many additional payments they have preliminarily determined to be qualifying. You don’t need to do anything until you receive an updated payment count or other communication from ED.
• If you know that you have qualifying employment that you have not yet certified with ED, you should certify that employment now by using the PSLF Help Tool at www.StudentAid.gov/pslf.
• You currently have Direct Loans and have not yet applied for PSLF: You will need to submit a PSLF form so ED can review your loans under the new rules and determine whether your current or past employers qualify for PSLF. You can submit this form through the PSLF Help Tool at StudentAid.gov/PSLF. Be aware that ED expects an influx of applicants due to the recent announcement, so you may see some delays in having your application processed. You will need to submit your application by Oct. 31, 2022.
• You have at least one federal student loan that is not a Direct Loan, such as a FFEL loan: You will need to submit a consolidation application and a PSLF form by Oct. 31, 2022 to ensure that payments made on loans that are not Direct Loans can be counted toward PSLF. Right now, ED recommends that you consolidate before using the PSLF Help Tool to certify employment. If you want to check your employer’s eligibility for PSLF before you consolidate, you can do so by logging into the PSLF Help Tool, which is available at StudentAid.gov/PSLF. If you have a mix of FFEL and Direct Loans, please refer to the sections above to understand how your Direct Loans will be affected.
• You previously tried to certify employment for PSLF but were denied: If ED previously said your employer was not eligible for PSLF then you need to submit a new form through the PSLF Help Tool to see if you can receive credit toward forgiveness. You can also see which employers ED has already deemed eligible through the PSLF Help Tool. Please note that this waiver does not affect qualifying employer rules. Your employer still needs to be a governmental organization, a 501(c)(3) organization, or a not-for-profit organization that provides a designated public service to get PSLF under normal rules and the Limited PSLF Waiver.
• You don’t know what kind of federal loans you have: It’s very common for borrowers to not know what kind of federal loans they have. You can see what loans you have by logging into your account on StudentAid.gov, going to the My Aid page (StudentAid.gov/aid-summary/), and scrolling down to the Loan Breakdown section. There, you’ll see a list of each loan you have borrowed, even if you have paid the loan off or consolidated it into a new loan. Direct Loans begin with the word “Direct.” Federal Family Education Loans start with “FFEL,” and Perkins Loans include the word “Perkins” in the name.

You can find additional information and helpful tools regarding the PSLF Program at https://studentaid.gov/manage-loans/forgiveness-cancellation/public-service. Additionally, you can find a fact sheet on ED’s updated PSLF program here.

Given these changes and the Biden Administration’s public commitment to addressing the barriers to attaining loan forgiveness under these programs, Attorney General Bonta today filed a stipulated notice of dismissal.

A copy of the stipulated notice of dismissal is available here.