Biden Orders ‘Streamlined’ Loan Forgiveness Program for Feds

President Biden this week issued new instructions to federal agencies involved in a popular, but difficult to use, program aimed at encouraging college graduates to pursue careers in public service, including the federal government, to make it less unwieldy to navigate.

The Public Service Loan Forgiveness Program was established in 2007 as a way to encourage young people to pursue careers in the government and nonprofit sectors. In short, it offers to forgive a person’s student loan debt following 10 years of working in a “public service” job, provided they continued to make regular loan payments for the entirety of that time period.

But in practice, the program has been exceedingly difficult for applicants to use successfully. Requirements surrounding the types of loans that can be forgiven, which frequently were not advertised correctly by lenders, questions around what jobs are eligible, as well as the deadlines and required repayment amounts during the 10-year period mean very few enrollees have successfully had their student loan debt forgiven thus far. And the Trump administration proposed—unsuccessfully—to end the program altogether in each of its four budget plans.

On Monday, Biden signed a sweeping executive order aimed at improving federal agencies’ customer service. In addition to promoting digitization of processes surrounding Veterans Affairs health benefits and applying for some Social Security benefits, the order instructs agencies to overhaul the Public Service Loan Forgiveness Program.

“The secretary of the Treasury, the secretary of Defense, the secretary of Education and the director of the Office of Personnel Management shall collaborate to enable a more streamlined Public Service Loan Forgiveness process for eligible borrowers, including those who serve in the United States Armed Forces or as civil servants, or who work for eligible nonprofit organizations,” the order states.

In a factsheet accompanying the order, the White House said under the order, student loan borrowers will need to only navigate a single web portal to manage their loans and repayment, and promised that Public Service Loan Forgiveness applicants “will be able to apply for the program with less paperwork than currently and without having to fill out forms with information they have already provided to the federal government previously.

The executive order comes after the Education Department announced its own plans in October to overhaul the loan forgiveness program to make it easier to use. The department is offering a waiver to its rules between now and Oct. 31, 2022, to allow potential enrollees to consolidate their loans into the correct Direct Loan program, and will apply that waiver to prior payments that previously had not qualified under the original rules.

The department also said it would review previously denied loan forgiveness applications and work to correct “processing errors.”