Kentucky Association of Counties

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The Kentucky Association of Counties

Expanded student loan forgiveness options announced for public employees

More county employees could qualify for student loan forgiveness under the revised rules.

On Oct. 6, 2021, the U.S. Department of Education announced changes to the Public Service Loan Forgiveness (PSLF) program rules for a limited time as a result of the COVID-19 national emergency.

PSLF allows borrowers with federal direct loans who make 120 qualifying monthly payments while working full-time for a qualifying employer – including counties – to have the remainder of their balance forgiven. Qualifying employers include any federal, state, local or tribal government and not-for-profit organizations.

“By cancelling loans after 10 years of public service, PSLF removes the burden of student debt on public servants, makes it possible for many borrowers to stay in their jobs, and entices others to work in high-need fields,” read a statement by the Department of Education. “Today, the Department of Education is announcing a set of actions that, over the coming months, will restore the promise of PSLF.”

Although the program has been in place since 2007, very few borrowers have successfully had their student loans forgiven.

A 2019 Government Accountability Office report found that around 99 percent of loan-forgiveness requests under the program were rejected. Out of almost 54,000 requests for forgiveness, just 661 were approved. Many of the borrowers were rejected for technical reasons, such as being in the wrong type of repayment plan.

The Department of Education is instituting a time-limited waiver on some of the program requirements so that more borrowers can qualify for forgiveness. Some student loan borrowers may receive credit for past payments made on loans that would otherwise not qualify for PSLF.

The waiver will run through October 31, 2022.

Learn more about how your county employees could qualify for student loan forgiveness here.

Kentucky Association of Counties
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