Student loan forgiveness for public sector workers. PLUS a possible deal on the debt ceiling

October 6, 2021

More than half a million qualified public servants with a federal student loan could be eligible to have it forgiven. Yes – you heard me right.

The department of education announced today that it’s revising the public service loan forgiveness program. That program isn’t new – it’s been in around for almost 15 years. It forgives remaining federal student loan debt for qualified public sector workers – like teachers, nurses, police officers, firefighters and those who work for 501c3 charitable organizations among others. To qualify you must have worked in one of those fields –full time –for at least 10 years and must have made at least 120 monthly federal student loan payments.

The whole idea was if you were willing to take your college education and forgo a lucrative job in the private sector and instead take your skills to the public sector, the federal government would forgive your loan after 10 years. But it hasn’t been that easy. Borrowers have been complaining about this program for years and the department of education admits that only a few thousand borrowers ever qualified. With today’s announcement the department says the revisions coming in the next few months will fix all that.

So what does this mean for you –

The department of education estimates 22,000 of you are eligible immediately to have your loan discharged and another 27,000 borrowers only need to verify their employment to have their loans discharged too.

As I said, if you think you fall into this public sector category you need to get on this right now. Go studentaid.gov/pslf for more information.

Read the announcement here.

There’s good news and bad news when it comes to the debt ceiling debate.

First the good news —

It looks like the Senate Democrats and Republicans have come to a deal. We’re still waiting on the final details.

The bad news is –

Nothing is done yet and the clock to the October 18^th deadline is still ticking… plus — if this deal goes through — we’ll have to go through this fight all over again in two months.

Here’s why –

If all continues to move forward on the current path — democrats and republicans will ultimately pass legislation to increase the debt ceiling through December of 2021.

Originally the house passed a bill that allowed the debt ceiling to be suspended until December of 2022. This deal shortens that time frame by a year.

So what happened?

The Republicans came to the table. Senate Minority Leader Mitch McConnell – after months of saying Republicans won’t engage in the debt ceiling conversation – offered two options – and this is the one Democrats have indicated they may be willing to take.

Again  – the details are being worked out and *no* legislation has passed yet. It’s unclear if or when it’ll happen.

But if it does — I am going to warn you — December is going to be déjà vu. Because if there’s no budget agreement — the federal government will run out of money on December 3 and with today’s deal — we’ll be up against the debt ceiling again around the very same time.