Student Loan Forgiveness

With the recent announcement to the creation and expansion of some Loan Forgiveness programs, the purpose of this email is to provide you with some general information on the specifics and help guide you.  Receiving this email does not imply that you are eligible for loan forgiveness as there are specific requirements for each of the programs mentioned below, please be sure to review those.  Here is some information on the recent announcements and the most common types of Student Loan Forgiveness.

Loan Forgiveness of up to $10,000 or $20,000

The U.S. Department of Education will provide up to $20,000 in debt cancellation to Pell Grant recipients with loans held by the Department of Education and up to $10,000 in debt cancellation to non-Pell Grant recipients. Borrowers are eligible for this relief if their individual income is less than $125,000 or $250,000 for households.  For some this will be automatic forgiveness and others will need to submit an application (once available) in order to qualify.  

• Nearly 8 million borrowers may be eligible to receive relief automatically because relevant income data is already available to the U.S. Department of Education.

• If the U.S. Department of Education doesn't have your income data, the Administration will launch a simple application which will be available by early October.

• If you would like to be notified when the application is open, please sign up at the Department of Education subscription page (https://www.ed.gov/subscriptions).

• Borrowers are advised to apply before November 15th in order to receive relief before the payment pause expires on December 31, 2022.

Visit https://studentaid.gov/debt-relief-announcement/ for more information.

Public Student Loan Forgiveness (PSLF) and Temporary Expanded Public Student Loan Forgiveness (TEPSLF)

Many of you might be familiar with the PSLF programs that have been around for a while.  While PSLF will continue with the recent announcements, the TEPSLF (or limited waiver) is set to expire on 10/31/2022.  The TEPSLF reduces many of the requirements that were previously in place.  In order to qualify under TEPSLF you must submit an application to your Loan Servicer by 10/31/2022, even if you do not currently qualify for Loan Forgiveness (have not made the qualifying payments yet).  If you are interested in learning more about PSLF or TEPSLF, Human Resources is certainly happy to guide you, it is also strongly recommended to visit studentaid.gov and create an account.  This will allow you to manage your loans more easily and also will allow you to ensure you have the correct types of Loans.  Having an account with StudentAid.gov will also allow you to view the different repayment plans that are available, potentially lowering your monthly payment while you make the 120 qualifying payments that are necessary.  Visit https://studentaid.gov/announcements-events/pslf-limited-waiver to learn more.  Here is a quick overview of the PSLF requirements that are waived with the limited waiver.

Normal PSLF Requirements

• Receive credit only on Direct Loans

• Repay under the 10-year Standard Plan or an income-driven repayment plan

• Make on-time payments

• Work full-time for a qualifying employer in order to receive credit

• Must work for a qualifying employer at the time of application and forgiveness

• If you got Teacher Loan Forgiveness, the period of service that led to your eligibility cannot also count toward PSLF 

Changes Until Oct. 31, 2022

• Receive credit for periods of repayment on Direct, FFEL, or Perkins Loans

• Periods of repayment under any plan count

• Periods of repayment on loans before consolidation count, even if on the wrong repayment plan

• Periods of repayment where payments were late or for less than the amount due also count

• Periods of repayment on loans before consolidation count, even if paid late or for less than the amount due

• Can get forgiveness even if not employed or not employed by a qualifying employer at the time of application and forgiveness

• If you got Teacher Loan Forgiveness, the period of service that led to your eligibility can count toward PSLF if you certify PSLF employment for that period

Unchanged Requirements

• Making 120 qualifying payments or the equivalent

• Being employed by the government, 501(c)(3) not-for-profit, or other not-for-profit organization that provides a qualifying service* (Working at WESD qualifies!)

• Working full time (for PSLF, you’re generally considered to work full time if you meet your employer’s definition of full time or work at least 30 hours per week, whichever is greater)

• Having Direct Loans or consolidating into Direct Consolidation Loans

• Certifying qualifying employment for the periods you seek credit toward PSLF

IRS Changed the educator expense deduction in 2022

IRS is increasing the educator expense deduction for teachers from $250 to $300.  Educators can claim this deduction, even if they take the standard deduction. Eligible educators include anyone who is a kindergarten through grade 12 teacher, instructor, counselor, principal, or aide in a school for at least 900 hours during the school year.  For more information on this IRS change please consult your tax advisor.  Visit https://www.irs.gov/newsroom/new-school-year-reminder-to-educators-maximum-educator-expense-deduction-rises-to-300-in-2022 to learn more.

Please contact Nate Beals with questions at Nathan.Beals@wesdschools.org or 602-347-3598