Time running out for 1M Californians to sign up for student loan forgiveness
SACRAMENTO – In partnership with California Attorney General Rob Bonta, the Campaign for California Borrowers' Rights on Monday launched a "California Student Debt Challenge," a statewide informational campaign on student loan forgiveness.
Some one million Californians in the public service sphere are eligible for loan forgiveness, but only 10,000 have received it since 2007, according to state data. Local leaders want to ensure as many residents as possible receive the relief they're entitled to.
Teachers, firefighters, non-profit employees, government workers and all who work in public service are entitled to loan forgiveness after 10 years of work, thanks to the Federal Public Service Loan Forgiveness program. But it's a widely unknown program, despite its potential to deliver tens of thousands of dollars of relief for those paying off debts.
For a limited time, the federal government is allowing eligible workers to recuperate funds from past periods of repayment that they missed, which for some, could significantly reduce or completely clear their loans. But borrowers must apply before Oct. 31 to receive these past credits.
"October 31 is the key day to get those past credits. It's a little less, I get it, than three months to put yourself on the path to low or no student debt," California Governor Gavin Newsom said at Monday's press conference. "California, we're making big changes across the board, not just to promote this program, but to make college more affordable."
Bonta and a coalition of students, higher education advocates and borrower protection organizations are calling on government and non-profit employers to "take the challenge" in informing their employees about these benefits and sign off on application forms, which will come at no cost for them.
"We must ensure every public sector employee—from teachers to firefighters, to nonprofit administrators, to state employees—knows about the Public Service Loan Forgiveness waiver period before it closes on October 31, before difficult hurdles are put back up," Bonta said.
Bonta said the program began in 2007 as an alternative for residents turning to private practice instead of public service careers because of hefty loan payments. That promise of relief never came after the Trump administration denied 99 percent of first-round loan cancellation applications, he said.
His office previously sued former United States Secretary of Education Betsy DeVos and the Trump administration, Congress took action and his team ultimately "won the fight," he said.
"But our battle, of course, continues," he said. "The Biden administration has waived key requirements for public servants to have their federal student loan debt wiped free, but here's the catch—you need to act, and you need to act now. While I've urged the Department of Education to extend the deadline and push for further fixes to the program, this waiver period is currently limited, and the deadline is fast approaching."
State Senator Monique Limón hopes to shed light on the growing problem student loans puts on graduates seeking employment. She authored Senate Resolution 96, a piece of legislation pending approval to recognize August as Student Loan Debt Awareness Month. Students should be able to pursue jobs that are meaningful to them, she said.
"It is unacceptable that this debt disproportionately affects women and people of color. In an economy where higher education is a prerequisite for many jobs, we cannot allow our dreams to be stifled by debt," Limón said.
Public service employers across the country are struggling to add and retain workers in this job market, and providing student debt relief is one way to keep people in the industry, said Ashley Harrington of the Department of Education's office of federal student aid.
"Advertising this program, talking about the benefits and making sure people know about this program that has a clear path to loan forgiveness is really important. We are committed to making sure every single public servant who is eligible gets the credit that they have earned," Harrington said.
In the Bay Area, residents owed nearly $26.6 billion in student debt, according to a 2018 analysis by the San Francisco Treasurer's Office. San Francisco Treasurer Jose Cisneros said this waiver program provides an essential opportunity to relieve a huge burden that weighs heavily on many families.
"I'm urging all eligible employers across our state to take similar action to share this important opportunity with your employees. With the deadline fast approaching, the time is now for your employees to apply and take advantage of this program," Cisneros said in a statement. "Please take the pledge to join the California Student Debt challenge, and let's work together to get this relief to as many of our employees as possible."
Employers and employees can learn more about the debt forgiveness program at studentaid.gov.