US soldiers eligible for PSLF have little time to apply under new rules, CFPB – Fox Business warns | Vette Leader

The clock is ticking for service members to potentially save money on their student loan debt by applying for the PSLF (Public Service Loan Forgiveness) program under its new rules. (isstock)

Tens of thousands of U.S. soldiers are running out of time to potentially save money on their student loans by applying for the federal government’s Public Service Loan Forgiveness (PSLF) program under its new rules, the Consumer Financial Protection Bureau (CFPB) has warned in a recent blog post.

An April 2021 US Government Accountability Office (GAO) report showed that as of January 2020, more than 176,000 active duty members had federal loans that were eligible for the PSLF program. At this point, only 124 of those borrowers had received forgiveness. Additionally, about half of active-duty members who have federal student loans have balances greater than $13,000, according to GAO.

The Department of Education expanded the PSLF program in October 2021 to allow more credits to qualify. But the changes are only for a limited time. Under the new rules, any prior payment made by a borrower eligible for the PSLF program will count as a qualifying payment. This is independent of the type of loan, the repayment schedule or whether the payment was made on time or in full.

Federal Family Education Loan (FFEL) program loans, Federal Perkins Loans, or other types of federal student loans that are not direct loans must be combined with the Direct Loan program by October 31, 2022 to qualify for forgiveness under the PSLF to qualify. Missing the deadline means borrowers risk losing thousands of dollars on potential government student loans.

If you have private student loans, the federal relief doesn’t apply to you. If you want to lower your monthly payments and reduce your student loan burden, you may consider refinancing your student loans. Visit Credible to find your personalized interest rate without hurting your credit score.

CFPB encourages service providers to use all available tools

In the blog post, the CFPB urged student loan service providers to take action, saying they are in the best position to help identify military borrowers and ensure they are getting the credit for their loan payments that they deserve.

“It is possible that tens of thousands of service members could benefit by submitting the correct documentation in a timely manner,” the CFPB wrote. “But to do that, service members need to get the information and support they need from their student loan officer.”

Loan managers also have the added benefit of knowing which of their borrowers are in the military and are already being paid to help them, the CFPB said.

“Managing student loan debt is a serious problem — these are not insignificant amounts of money. Many military borrowers have educational loans that exceed the average home mortgage in America,” the CFPB wrote. “If military borrowers don’t approve their PSLF application, they will be forced to unnecessarily pay thousands or tens of thousands of additional dollars on their student loans.”

If you have private student loans and are not eligible for federal forgiveness programs, you may consider refinancing to lower your monthly payments. Visit Credible to compare multiple student loans at once and choose the one with the best interest rate for you.

Biden says he will make decision on student debt

Federal student loans are currently on COVID-related forbearance and payments have been suspended until August 31. During this time, borrowers are not required to make payments on their loans and interest rates have been set at 0%. The Department of Education has also stopped collecting defaulted loans.

President Joe Biden confirmed he would rule on student debt by the end of August, although it wasn’t clear whether he was referring to a widespread student loan decree or an extension of the student loan payment pause. Biden has previously indicated he is considering forgiving some student debt, but not the $50,000 debt reduction some Democrats have been calling for.

According to a recent NPR/Ipsos poll, more than half of Americans (55%) said they would support forgiving up to $10,000 in federal student debt per borrower. However, this support has faltered when it came to higher debt relief. Only 47% of Americans said they support forgiveness of up to $50,000 in student loans, and 41% said they support cancellation of all federal student loan debt.

If you’re trying to pay off your personal student loans, a refinance could help lower your interest rate and reduce your monthly payments. To see if this is the right option for you, contact Credible to speak to a student loan expert and get all your questions answered.

Do you have a financial question but don’t know who to contact? Email The Credible Money Expert at moneyexpert@credible.com and your question could be answered by Credible in our Money Expert section.

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