Last week, the Washington Post reported that the Trump administration plans to include a potentially big blow to student loan borrowers in its education budget proposal: an end to the Public Service Loan Forgiveness (PSLF) program.
Unveiled in 2007, PSLF is currently slated to begin awarding federal student loan forgiveness to eligible public sector and nonprofit workers later this year. At first, the report suggested those plans may be in jeopardy. However, more details have emerged that indicate current federal student loan borrowers will still be able to receive forgiveness through PSLF. The proposal would only impact new borrowers on or after July 1, 2018.
According to the the latest Public Service Loan Forgiveness statistics, 552,931 borrowers have been approved and are potentially slated to receive forgiveness through PSLF.
Is this the end for PSLF?
Not yet, at least. Currently, this is merely a proposal put forth by the Trump administration. While this certainly isn’t encouraging for the PSLF program, the president does not make the budget. That’s up to Congress.
In other words, before there are any changes to PSLF, Congress must take action.
Does this proposal impact current borrowers who are currently on track to get PSLF?
Based on a May 23 conference call with reporters, this proposal would not impact current borrowers who are looking to receive forgiveness through PSLF. Borrowers currently on track to receive forgiveness through the program should be able to do so as originally outlined. The proposal would only impact borrowers who take out their first federal student loans on or after July 1, 2018, according to the Washington Post.
This means that anyone who’s already borrowed federal loans should remain eligible for PSLF as well as anyone who begins borrowing prior to July 1, 2018. It appears that whether or not borrowers begin making PSLF-eligible payments or submitting Employment Certification Forms by this deadline would not impact eligibility. Only the borrowing date would matter.