Hundreds of thousands of Coloradans who are current or former public servants could be eligible for federal student debt forgiveness under a revised loan waiver that should make it easier to qualify — but time is running out to apply, state officials warn.

The program, Public Service Loan Forgiveness, was launched in 2007 and is separate from the federal student loan cancellation plan recently announced by the Biden administration.

“This program, historically, really hasn’t worked very well,” said Kelsey Lesco, Colorado’s student loan ombudsman with the state attorney general’s office. “It was designed to provide relief for borrowers who worked full-time for public service employment but it really fell short of that. Approval rates ranged between 1% and 3% for this program. This waiver was designed to rectify some of those systemic problems this program has had.”

People who qualify for federal public service loan forgiveness include:

• Current or former full-time public servants — including government employees, teachers, nurses and doctors in public hospitals, legal aid attorneys, nonprofit employees, etc. — with federal student loan debt who made at least 120 qualifying payments and have at least one Direct Loan and at least one approved PSLF form.

Changes last year to the program include counting previous loan payments toward repayment that would otherwise not qualify, Lesco said. The former program only counted qualifying loan payments under certain repayment plans like income-driven payment plans.

Lesco said this information wasn’t communicated well, meaning some public servants would work for 10 years to reach the number of qualifying payments needed to apply for loan forgiveness only to find out they had been in the wrong payment plan all along and that their years of service didn’t count.

“People wondered if they should do 10 more years with all this interest accumulating and hope they can pay them off or if they should leave the public service role that pays less than private sector and try to make enough money to pay off their student debt,” Lesco said. “A lot of people ended up having to leave those roles.”

The most recent estimate Lesco has for how many public servants in Colorado could be impacted by the change is 2016 data that shows there were 133,000 government employees and 25,000 nonprofit employees in the state.

For a limited time, borrowers who made past payments that were deemed non-qualifying can have those payments count for the purposes of the forgiveness program. This applies to retirees or people who left their public servant jobs, Lesco said.

“We’ve had people call into our office who — for example, a retired teacher who taught for 20 years — was able to go back and have her years of teaching count under this waiver and her loans were able to be forgiven under this waiver so these are really huge impacts this is having,” Lesco said.

The deadline to apply for the waiver expires on Oct. 31.

Qualifying borrowers must have federal direct or direct consolidation loans, meaning qualifying people with Federal Family Education Loans or Federal Perkins Loans will need to consolidate their loans.

Before consolidation, borrowers can check if they have a qualifying employer at studentaid.gov/pslf/employer-search.

Then, borrowers must fill out an online form that could require paperwork from the qualifying employer. To fill out the form and learn more information about the program, visit studentaid.gov/pslf/.

“People have a very limited time to act right now,” Lesco said. “It’s extremely important that people take advantage of this. It’s a life-changing opportunity.”

Since the waiver was issued last October, Lesco said her office has recovered more than $1.1 million in student debt forgiveness for people in Colorado and that she knows there are more qualifying recipients out there.

Anyone in Colorado with questions about their student loans is encouraged to contact the state’s student loan ombudsperson, who can walk them through their questions. Ombudsperson Kelsey Lesco can be reached at 720-508-6975 or [email protected].

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