Many students believe they’re paying their way toward forgiveness, only to find they hold a loan or are enrolled in a repayment plan that disqualifies them from the program.
Since the DOE first began accepting PSLF requests in October 2017, some 13,000 people have applied but just 1,000 are expected to be eligible, a DOE spokesman told CNBC.
Nancy Conneely, director of policy at AccessLex Institute, which provides financial education to students and schools, applauded the funding.
“This is a great first step in ensuring the program is doing what it was intended to do —incentivize people to work in public service,” she said.
But Jonathan Fansmith, director of government relations at the American Council on Education, said the $350 million is not enough to cover all the borrowers who would be eligible if they were simply enrolled in a different repayment plan.
Last month, Senate Democrats tried to secure $4 billion to mend the program.
The “first-come, first-served” stipulation, he added, was surprising.
“You usually don’t see that in federal policy,” he said. “Loans work like an entitlement.”
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