Student Loan Bill Could Have Qualified Borrowers Debt Free In 5 Years
“The Biden Administration put the Department of Education back on the side of students and hardworking American people ... and our new bill would make those improvements permanent.”
Student loan debt continues to be a concern Americans have as they wait for the Biden Administration to decide whether to enact a wide-scale student loan cancelation. While there haven’t been many updates on that front for some time, one U.S. congressperson has proposed new legislation which, if passed, could have people debt free in five years. Here’s what you need to know.
According to Forbes, U.S. Representative Joe Courtney (D-CT) has proposed new legislation called the Simplifying and Strengthening PSLF (aka Public Service Loan Forgiveness) Act. The new legislation aims to make it easier for student loan borrowers who take part in the public service loan forgiveness program to actually qualify for, and reap the benefits of, loan forgiveness. The bill would do this by making the PSLF program, designed to forgive student debt for public servants after ten years of payments, more straightforward to apply for and be approved.
There are four critical points in the proposed Simplifying and Strengthening PSLF Act that, should it pass Congress, would change how the PSLF Act works and make it easier for Americans to qualify, including:
- Student loan forgiveness after five years: Currently, the PSLF Act requires ten years of student loan payments without failing to qualify for forgiveness. However, the proposed changes would shorten that time to five years.
- Increase eligibility of payments: Currently, the PSLF outlines which payments are eligible to be counted towards the loan payments over ten years to qualify for forgiveness. The new legislation would make more loan payments eligible to count towards the five years of on-time payments.
- Consolidate student loans: The new legislation would allow people to consolidate student loans again, even if they’ve already done so through Parent PLUS Loans or FFELP Loans.
- Forbearance student loans will count: For people in the military or on active duty, student loan borrowers could get credit for forgiveness even if they were in student loan deferment or student loan forbearance.
“The Biden Administration put the Department of Education back on the side of students and hardworking American people—they made that clear when they overhauled PSLF last fall, and our new bill would make those improvements permanent,” said Congressman Courtney in a press release.
He continued, “October’s overhaul of PSLF was a big step in the right direction, and our new bill would codify those improvements along with an additional slate of upgrades to make it easier for America’s public service workers to qualify for, navigate, and benefit from this patriotic program.”
There has been no recent update on the Biden administration’s efforts for a wide-scale student loan cancelation over the past few weeks.