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Topline
The Biden administration announced Friday about 55,000 student loan borrowers will have their debts forgiven, totaling nearly $4.3 billion in relief, marking the latest wave of student loan forgiveness under a program intended to benefit public service workers.
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The Biden administration estimates about $180 billion in student loan debt has been forgiven for … [+]
Key Facts
Borrowers enrolled in the Public Service Loan Forgiveness Program (PSLF) will have their student debts canceled, the Education Department said Friday.
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The program is designed to provide debt relief for those working in public service roles, including teachers, nurses, social workers, first responders, service members and others who have made at least 10 years of payments.
Some borrowers who enrolled in a temporary waiver under PSLF in 2022, allowing some borrowers to receive credit for previously ineligible periods, also received relief, according to the agency.
This relief is the result of “significant fixes” to the program by the Biden administration, which introduced an online application earlier this year allowing borrowers to request relief directly, after the program was associated with lengthy delays or challenges for borrowers to complete, the Education Department said.
As of July 2024, the PSLF program is now fully managed by the Education Department rather than a single loan service, making it easier for borrowers to track their progress for debt relief, the agency said.
The Education Department did not say whether eligible borrowers would be notified about their debt relief, though the agency previously noted borrowers whose loans were forgiven did not need to take additional steps to receive their relief.
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Big Number
$180 billion. That’s how much the Biden administration has approved in student loan forgiveness for nearly 5 million Americans, according to the Education Department. About $78 billion in relief has been approved for just over 1 million borrowers through PSLF, after only 7,000 borrowers received debt relief through the program before the Biden administration.
Surprising Fact
Biden has scrapped new plans to cancel student loans for more than 38 million Americans, as his administration will likely be unable to approve relief before Donald Trump takes office in January, the Associated Press reported Friday, citing Education Department documents. The agency will instead focus on other regulations in the Biden administration’s final weeks, including helping at-risk borrowers get back on track, the documents said.
Key Background
Created in 2007, the PSLF was weighed down for years with criticism about delays in relief and issues with completing the program’s application. Only a quarter of American workers were eligible under the program in 2013, and many were delayed or denied access to relief by loan services, according to the Consumer Financial Protection Bureau. About 2.3% of applications for PSLF were approved between 2013 and 2021, according to the Education Data Initiative, an analysis firm studying the U.S. education system. Trump, the president-elect, called to revoke the program during his first administration and has reportedly called the latest efforts by Biden to cancel student debt “vile.” Trump’s transition team is considering revoking Biden’s SAVE plan, a debt relief program designed to help borrowers facing financial hardship, according to Politico.
Further Reading
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