Public Servants Released From Student Debt ‘Sentence’

Retroactive changes to a loan forgiveness program are wiping the slate clean

Teacher interacting with kids in class with tablet

Klaus Vedfelt/Getty Images

Merrie Wolf, a 67-year-old public school teacher in Tulsa, Oklahoma, had cried before about her student loans. But this time it was tears of joy. 

Last week she confirmed that her remaining student loan balance—$49,552.18—was being forgiven as part of a massive overhaul of the Public Service Loan Forgiveness (PSLF) program meant to correct past failings. In 2019, Wolf was devastated to learn that she would not be getting the forgiveness she’d been promised after paying her loan dutifully for the required 10 years. In fact, none of her payments actually counted, she was told, and she would have to start over, at age 64.

“It put me into a pretty serious depression,” Wolf said of the 2019 phone call she had with a representative of the company handling her loan account on behalf of the Education Department. “I was hysterical. I thought, all I can do is bite the bullet and start paying again.” 

Key Takeaways

  • While proposals to broadly forgive federal student loans haven’t materialized, at least 30,000 public servants are having their debt wiped out entirely under changes to the Public Service Loan Forgiveness program that apply retroactively.
  • The PSLF, started in 2007, promised to zero out remaining loan balances if borrowers worked in government or nonprofit jobs for 10 years, but very few qualified due to what even the U.S. Education Department admitted were overly strict and complex rules. 
  • Borrowers granted forgiveness in recent weeks say they’re overwhelmed with relief.

Wolf was sure she had followed all the rules for the program, which wipes out federal student loan balances for qualifying government and nonprofit workers if they make payments for 10 years under certain repayment plans (mainly plans that determine your payments based on your income). But somewhere along the way—she’s still not entirely clear what went wrong—she had run afoul of what even the Education Department recently described as overly strict and complicated requirements.

A math teacher with 26 years of experience, Wolf makes about $60,000 a year and had continued to pay $195 a month after getting the bad news in 2019. But after surviving a bout with the coronavirus that she says left her with long COVID-19 symptoms, she wasn’t sure she could work another 10 years—only payments made while working for a qualifying employer count—and dreaded the prospect of having to continue her career into her mid-70s.

“I didn’t really want to believe it until I saw it in writing,” Wolf said of the email she got last week confirming her loan was forgiven. “The tension and the fear of having to be stuck teaching for another 8 to 10 years—when I don’t think, physically, I can do it—went away. It’s just hard to describe.” 

Wolf is among the first beneficiaries of the program overhaul announced by the Education Department in October. As of Nov. 12, the date of the most recent data available, the remaining balances of 10,000 government and nonprofit workers owing $715 million had been erased, a department official said. Another 20,000 borrowers were set to have their loans forgiven, many of them over the ensuing weeks. All told, $2 billion in loans will be wiped out in this first round.

As forgiveness notices have rolled in, borrowers are reporting that their lives are vastly changed overnight. Wolf said she may retire at the end of the year. Others may get married, buy cars, or start saving for their kids’ college, they’ve written on online message boards. Elka Adams, an English teacher at a performing arts middle school in San Diego, plans to finally start saving for a house.

“It’s such a relief,” said Adams, who was notified last week that her $40,000 in student debt was being wiped out. “I feel like I’ve been released from this sentence.” 

98% of Applicants Rejected

Meanwhile, student borrowers who aren’t in public service are waiting to see if President Joe Biden will fulfill a campaign promise to wipe out at least $10,000 of debt for every borrower with federal student loans. Many are losing hope that he will as a pandemic-triggered freeze on student loan payments and interest nears its Jan. 31 end date.

The PSLF program, created in 2007, was meant to encourage people to take up careers in high demand, like teaching, nursing, or firefighting, even though they may pay less than other occupations. But only about 16,000 borrowers had ever had their remaining balances zeroed out when the Biden administration announced the overhaul on Oct. 6.  Almost 98% of applicants for forgiveness had been rejected as of July.

“Borrowers who devote a decade of their lives to public service should be able to rely on the promise of Public Service Loan Forgiveness. The system has not delivered on that promise to date, but that is about to change for many borrowers who have served their communities and their country,” U.S. Secretary of Education Miguel Cardona said in a statement about the changes.

While the department is considering permanent changes to the rules, the thrust of the overhaul so far is a special waiver period that lasts through Oct. 31, 2022. The waiver eliminates many of the program’s restrictions, giving credit for past payments that didn’t count before and reconsidering some applications for forgiveness, like Wolf’s, that were previously rejected.

Past payments now count even if they were made on what was previously the wrong type of loan (like a Perkins or Federal Family Education Loan) as long as borrowers consolidate into a direct loan during the waiver period. Payments will also count if they were made with any type of repayment plan or if they were late, or not for the full amount.

“In some instances, borrowers missed out on credit toward PSLF because their payments were off by a penny or two or late by only a few days,” the Education Department said last month.

Almost 1 Million Already in Program to Benefit

All told, the department is estimating 965,000 borrowers, or 74% of the 1.3 million who have certified their employer, will receive credit for additional months of payments and move closer to forgiveness.


The PSLF Help tool,  which determines your eligibility for forgiveness and if your employer qualifies, was updated on Sunday to incorporate the latest rule changes, according to an Education Department official.

For some borrowers under income-driven repayment plans, paying off student loans was a one step forward, two steps back dance that never made any progress. Forgiveness under the program was their only realistic way out. 

Nicole Griffin borrowed around $95,000 to attend law school at the University of Florida, but by the time her debt was forgiven earlier this month, her outstanding balance was $115,000. (She believes she was one of the few to have been granted forgiveness under the original rules of the program because she had recently finished her 10 years of payments and applied for forgiveness.)

When Griffin graduated in 2008, she decided to go into government work so that she could have her loans forgiven. But her job in the Florida foster care system and others that followed weren’t highly paid, she said, and she found herself struggling just to meet basic living expenses because of the heavy burden of student loan payments. The income-driven payments—over $300 a month—weren’t enough to keep ahead of the interest her loan was building up, so she never made a dent in the principal. 

“It was a weird situation being a lawyer working for indigent people, and realizing that you’re basically indigent yourself, and you need somebody to help you do the things that you’re trying to help other people to do,” said Griffin, who now works at the Department of Veterans Affairs in Washington, D.C., representing veterans. “That’s definitely weighed on me and created more stress.”

While Griffin is planning a two-week safari to celebrate, borrowers like Wolf—for whom forgiveness came as a surreal surprise—are giddy over the new possibilities. She might visit relatives, resume some old hobbies, or even try working in a manufacturing plant.

“I feel like my future’s unlimited even though I’m 67,” Wolf said. “I’ve got unlimited options.”

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  1. Department of Education Federal Student Aid. “Public Service Loan Forgiveness (PSLF).”

  2. Department of Education. “Fact Sheet: Public Service Loan Forgiveness (PSLF) Program Overhaul.”

  3. Twitter. “@joebiden, 7:28 PM - March 20, 2020.” 

  4. Federal Reserve Bank of New York, Center for Economic Data. “At a Glance: Findings from the August SCE Public Policy Survey.”

  5. Congressional Research Service. “The Public Service Loan Forgiveness Program: Selected Issues.”

  6. Federal Register. “Request for Information Regarding the Public Service Loan Forgiveness Program.”

  7. Department of Education Federal Student Aid. “PSLF Waiver Offers Way to Get Closer to Loan Forgiveness.”

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