Education Department Approves Student Loan Forgiveness for 11,500 Borrowers in April

U.S. Education Department reported that approximately 11,500 borrowers received student loan forgiveness under the Public Service Loan Forgiveness program during April. The approvals were disclosed in an updated court filing submitted this week that also included statistics on repayment plan processing.

The department had previously reported more than 10,000 discharges in March and more than 12,000 in February.

The department also approved approximately 6,600 borrowers for forgiveness through the PSLF Buyback program. The program allows borrowers to make lump-sum payments to retroactively qualify periods of deferment or forbearance. This month's figure marks a processing high and the first recorded decrease in the program's application backlog.

New regulations scheduled to take effect July 1 would allow the department to disqualify employers from PSLF participation if they engage in activities the department determines have a substantial illegal purpose. The rules would apply to certain nonprofit organizations and government entities.

The regulations stem from an executive order issued more than a year ago directing the department to bar specific organizations from the program. The department stated that the changes are intended to ensure taxpayer-funded benefits are provided only to organizations engaged in lawful activity.

At least three lawsuits have been filed by coalitions of nonprofit organizations and Democratic-led states challenging the regulations. The plaintiffs have filed motions for summary judgment seeking to block the rules before the July 1 implementation date.

The challengers argue that the regulations exceed the authority granted by the PSLF statute enacted in 2007. They contend that the statute does not authorize the department to disqualify borrowers based on employer activities.