Education Law

Biden administration announces PSLF plans, and ABA suggests extension of student-loan payment pause

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Credit for the Public Service Loan Forgiveness program will be extended to all with qualifying jobs and government school loans, regardless of whether they made late payments, paid in installments or in lump sums, the U.S. Department of Education announced Tuesday.

Qualifying borrowers with 20 or 25 years of payments will start receiving loan discharges in November, according to a news release. A fact sheet included with the release states that updated regulations will be published Nov. 1.

Borrowers with Direct Loans or Federal Family Education Loans qualify; those with other types of federal loans must consolidate into the Direct Loan program to receive PLSF credit, according to the fact sheet.

The Biden administration in August announced temporary changes to the program. Actions from the temporary plan and the “permanent improvements” announced Tuesday provide borrowers with many of the same benefits, according to the Oct. 25 news release.

To be eligible, borrowers must be government employees; work for a charitable, nonprofit employer that is tax-exempt under 501(c)(3) of the Internal Revenue Code; or be employed by nonprofits with different tax statuses that provide specific public services, according to the DOE’s Federal Student Aid website.

“The American Bar Association welcomes changes to the PSLF program that make it easier for public service employees to get loan forgiveness as intended by the original legislation. We applaud lawyers and other professionals who accept jobs serving the public, especially in rural communities. We have often advocated for reforms to the PSLF program, and we appreciate the Administration’s efforts to make the program more broadly available and the process easier to access,” Deborah Enix-Ross, president of the ABA, said in a statement.

A senior adviser to the International Dispute Resolution Group at Debevoise & Plimpton, she sent an Oct. 24 letter to the DOE on behalf of the ABA. It asked that the Oct. 31 temporary waiver deadline for PSLF be extended, as well as the Congress-enacted student-loan payment pause, which is scheduled to expire Dec. 31.

“These protections continue to greatly assist many professionals just beginning their careers— including recent law school graduates and younger attorneys—who are still experiencing the adverse and lingering economic effects of the COVID-19 pandemic and the rapidly increasing costs of housing, transportation and groceries,” Enix-Ross wrote.

In 2016, the ABA sued the department after it changed an interpretation of PSLF regulations. The U.S. District Court for the District of Columbia lawsuit settled in 2020 after the agency agreed to recognize ABA full-time employees as public service workers who are eligible for student-loan forgiveness.

In her Oct. 24 letter, Enix-Ross also asked the department to develop eligibility rules covering people who specifically perform public service jobs, including at nonprofit organizations. The letter notes that the ABA opposes any proposed changes that would restrict eligibility of public education services jobs only to those who work with students in school-like settings.

Meanwhile, federal court challenges to the PSLF program have been brought in Wisconsin and Missouri. An emergency request by the Wisconsin-based Brown County Taxpayers Association to block the program was denied by U.S. Supreme Court Justice Amy Coney Barrett Oct. 19. The second case, filed by six Republican-led states in the Eastern District of Missouri, was dismissed for lack of standing Oct. 20.

See also: “8th Circuit temporarily pauses student-loan forgiveness program” “Lawyer who says student-loan forgiveness leaves him worse off sues to block program”

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