Deadline Nearing, White House Plans Wider Changes to Public Service Student Loan Relief

The changes announced Tuesday “are good news for borrowers,” said Mike Pierce, the executive director of the Student Borrower Protection Center, an advocacy group. “The administration realized that the system was bending under the deadline, and they found a way forward for most people.”

The changes will give most borrowers — even those who do not apply before the deadline or who apply but later discover problems with their application documents — a margin for fixing mistakes or glitches.

But two groups do face cutoffs: Those who no longer work in public service will still need to apply by Oct. 31, and people who have Federal Family Education Loans — a type of federal loan issued by private lenders before 2010, when the program ended — will need to consolidate into a direct loan before July 2023 to be eligible for the one-time adjustment. Those people will need to apply for consolidation before May 1, 2023, the Education Department said.

The changes to the public service relief program come as the federal government is fighting in court to roll out the wide-scale student debt cancellation of up to $20,000 per borrower that President Biden announced in August. The Education Department planned to start canceling debts soon, but a federal appeals court last week temporarily blocked those plans while it considers a request from six Republican-led states for an injunction prohibiting the administration from proceeding.

The combination of the looming public service program deadline and Mr. Biden’s promised broad debt cancellation has overwhelmed loans services, the companies hired by the government to collect payments and counsel borrowers, with calls from frantic applicants.

“Borrowers have lots of questions, and the department has not provided us with clear and workable answers,” said Scott Buchanan, the executive director of the Student Loan Servicing Alliance, a trade group.

The changes announced on Tuesday to the public service program will add to the “ongoing confusion,” he said. Mr. Buchanan advised borrowers to be patient, reminding them that all who apply before Monday’s deadline will be eligible for relief, even if it takes months longer for their applications to be processed and for their debt to be discharged.

Today’s announcements are big steps, but they won’t be the end of the story,” James Kvaal, the Education Department’s under secretary, said on Tuesday. “We’re going to keep working to improve this program. People who spend their careers teaching in our schools, helping the most vulnerable, serving our country — they deserve an easy, simple and transparent path to public service loan forgiveness.”