Thousands of public service workers across the country receive good news for the holidays: the federal government is waiving their student loan debt.
The development comes after they were initially rejected for a program meant to reward their chosen career path.
However, after the Biden administration announced a limited waiver period in October, many of those workers are now finding out that they will get the relief.
Watch the story on NBC10 Boston news at 11 p.m.
Don’t blame Maija Meadows Hasegawa, librarian at the North End branch in Boston, for feeling a little dizzy since hearing the news.
“This is my best Christmas present,” Meadows Hasegawa told me. “When January rolls around, I don’t feel like I’m automatically writing another check. “
This perspective is radically different from when we first introduced Meadows Hasegawa to you two years ago.
With 10 years in the public service, the government will write off the remaining student loan debt. But as thousands of people have discovered, it can be nearly impossible to get this approved.
At the time, she was working as a librarian at the Boston Public Library. Despite a decade of hard work and monthly student loan payments during that time, Meadows Hasegawa learned that she did not qualify for the Public Service Loan Forgiveness Program (PSLF).
Meadows Hasegawa recalled how the financial blow made her question whether she should have gotten a master’s degree and pursued her dream job.
“It was like I had done all of this work and all of these loans were attached to me,” said Meadows Hasegawa. “I work in the field I really want, but I just feel like you’re being punished for it.”
In theory, the PSLF program seems so simple. If you work in the public service, you must make 120 qualifying loan repayments, which equals 10 years of debt repayment. After that, a borrower’s unpaid debt would be canceled.
However, as we reported earlier, Meadows Hasegawa and the vast majority of applicants were turned down. At the time, the US Department of Education’s acceptance rate was only 1%.
Many of the rejections resulted from technical details like having the wrong type of federal loan or some type of ineligible payment plan.
The federally announced waiver means people who have been disqualified will get a second review to see if they should have been approved.
“Thousands of borrowers are going to benefit,” said Adam Minsky, a Boston student loan lawyer. “We may be looking at billions of dollars in aid, so this is a huge deal.”
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Minsky told me that the review process should happen automatically, but if borrowers don’t want to leave anything to chance, they should go to studentaid.gov/pslf to make sure the government has all the correct details. .
“Get information about your loans and your employment. If you think you qualify, start working on the steps to get relief, ”Minsky said. “It is really worth it. And it’s not forever because you only have until October of next year to act.
According to the US Department of Education, the limited waiver immediately means 670 Massachusetts borrowers will receive approximately $ 42.8 million in loan forgiveness.
Nationally, the waiver is expected to help more than 550,000 borrowers progress to the PSLF, with the average borrower receiving 23 additional payments.
For reference, only around 16,000 borrowers had already benefited from a discount under the PSLF.
“The system has not delivered on the program’s promises to date, but this is about to change for many borrowers who have served their communities and their country,” said US Secretary of Education Miguel Cardona. , in a written statement.
Meadows Hasegawa has already been notified that her remaining student loan debt of approximately $ 40,000 will disappear. She even saw refunds appear in her bank account for overpayments beyond the 120 she had already made.
Financial aid suddenly releases a large amount of money each month as she and her husband are raising their toddler.
“It’s something that brings us into the New Year with new opportunities,” Meadows Hasegawa told me. “We have new dreams that we can think of.”