Report: Budget Bill Provides $350M to Forgive Student Loan

A $350 million expansion of a federal program included in the $1.3 trillion omnibus budget bill signed Friday by President Donald Trump could forgive the student loans of such public-service workers as teachers, police officers and nurses.

The one-time reprieve is for borrowers who are no longer eligible for other federal student-loan forgiveness programs, USA Today reports.

“I’m very glad that, for the first time, we got some money to help public servants unfairly trapped under a mountain of debt,” Sen. Elizabeth Warren, the Massachusetts Democrat, told the newspaper.

She cautioned, however, that the fight to relieve Americans caught up in as much as $1.4 trillion in student loan debt continues.

The bill Trump signed Friday provided the $350 million to the Education Department for the program that would “remain until expended” on a first-come, first-served basis for students who are no longer eligible for loan forgiveness.

According to USA Today, the Education Department would determine eligibility by comparing a borrower’s most-recent monthly repayment amount with that for the same month the previous year.

Those paying less than they would have in a qualified repayment program would not be eligible for loan forgiveness.

In addition, $2.3 million would be set aside for outreach efforts by the agency to borrowers who would have qualified for loan forgiveness but mistakenly chose or were misled into incorrect options, USA Today reports.

The program was created in 2007 and designed for borrowers in public-sector jobs who would have their debt forgiven after making 120 repayments under one of the Education Department’s qualifying repayment plans.

Each repayment was required to be made in full and on time. Qualified borrowers must work for a federal or local governmental agency or for an eligible non-profit organization.

Borrowers of direct loans from the federal government are the only ones eligible, according to USA Today.

Private loans and non-direct government loans do not qualify, though such existing debt can be combined into the federal direct loans.


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