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Student-Aid Group Suggests Changes in Loan Forgiveness for Public Service

Report: “Nasfaa Task Force Report: Public Service Loan Forgiveness”

Organization: National Association of Student Financial Aid Administrators (Nasfaa)

Summary: Nasfaa’s Public Service Loan Forgiveness Task Force offers several policy recommendations for improving the loan-forgiveness program.

Among them is limiting the amount of debt that can be forgiven. Borrowers could have forgiven all of their qualifying loans up to the aggregate federal Stafford limit for undergraduates, plus half of their additional qualifying loans—but with total forgiveness capped at the aggregate Stafford limit for graduate students. Those who still had a loan balance could repay it in an income-based plan and qualify for its forgiveness provision.

The task force also recommends keeping the forgiveness tax-free.

Bottom Line: The proposed cap on loan forgiveness is intended to allow both undergraduate and graduate borrowers to benefit from the program without funding multiple advanced degrees for an individual or supporting excessive borrowing.

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