Source: Christine Stuart, CT News Junkie
The Student Loan Fund wants to make sure that a hundreds thousand Connecticut residents who qualify for the Public Service Loan Forgiveness Program get the student loan forgiveness they are due.
“Until recently less than 2 percent of borrowers obtained forgiveness through the program,” Cristher Estrada Perez, executive director of the Student Loan Fund, said.
She said that’s due to historically poor program management.
Public sector workers like firefighters, teachers, police, and other municipal and state workers or veterans can have their entire student loans forgiven by choosing jobs in the public sector — the average paid out is $60,000. That’s separate from the new program approved by U.S. President Joe Biden last month, which allows forgiveness of between $10,000 and $20,000 for most students.
While the White House has recently made new announcements about other forms of student loan forgiveness, the PSLF Waiver remains the largest opportunity for public sector workers, but is due to sunset on October 31.
Perez said they estimated more than 110,000 Connecticut residents are eligible for forgiveness under the Public Service Loan Forgiveness Program. That’s in addition to the 450,000 Connecticut residents who may qualify for the lesser amounts under the latest program.
“It can be a very complicated process and every individual case is just that,” Perez said.
She said that’s where the Student Loan Fund comes into help. She said they will help people navigate the application process.
Perez said she’s not just the executive director of the program, but she’s a woman of color who graduated with $80,000 in student loan debt.
Hartford Mayor Luke Bronin stressed that it’s life-changing.
He said that’s why he’s encouraging everybody to apply before Oct. 31, even though the program will continue to exist for public sector employees.
As president of the Connecticut Conference of Municipalities, Bronin said he’s also encouraging other leaders of Connecticut’s cities and towns, to get the word out to their municipal employees across the state who qualify for this program.
Melissa Streeto, president of the Connecticut Association of Prosecutors, said she incurred an incredible amount of debt following a bachelor’s degree and then three years of law school.
“I had this mortgage sized amount of debt that I knew I was going to have to pay off,” Streeto said.
She said she was denied the first time she applied because of very technical requirements. Then, U.S. Education Secretary Miguel Cardona got rid of all those hyper technical requirements in 2021 that allowed her to apply for the forgiveness and her entire withstanding loan balance from college and law school was erased.
“As someone who has benefited from the program, it is clear that it incentivizes exceptional candidates to seek employment in vital public service positions, and, just as importantly, incentivizes them to remain in these critical positions, serving our most vulnerable citizens,” Streeto said.
The Urban Institute released a report this week that found a significant reduction or elimination of monthly student loan expenses could move households on the margins to homeownership readiness.
The report also found it could improve their credit scores. Student loan default can cause credit scores to drop up to 90 points.
Having these delinquencies and defaults erased from their credit histories could help student loan borrowers’ credit scores rebound enough to reach a score that would make them eligible for a mortgage.