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Do college graduates have regrets about their chosen majors?
With the rising cost of college, Americans currently owe nearly $1.8 trillion in student loan debt. What majors are worth the money?
Around 55,000 public employees nationwide — individuals who work for federal, state, local, tribal government or a non-profit organization — could see their student debt cancelled through a new round of federal loan relief.
The Biden administration Friday announced $4.28 billion in relief through the Public Service Loan Forgiveness (PLSF) program, which permits these employees to cancel remaining debt after they have made at least 120 payments towards paying them off.
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The PSLF program was created through a bipartisan law in 2007, but due to processing errors and poor design, did not serve the thousands of public employees whose service it was meant to recognize, even rejecting 99% of applicants in one year.
In its first year of implementation in 2018, only 55 out of more than 19,000 borrowers had their loans forgiven, and only 890,000 were approved from more than 1.1 million who applied, the Government Accountability Office reported in 2018.
The government then implemented several recommendations made by GAO to fix the program, but it remained ineffective compared to the historic impact it was intended to have. Its critics say it has failed to serve as an incentive for public employees with student loans to stay in in low-paying jobs.
In 2022, a one-time pandemic-era waiver permitted anyone who worked full time in an eligible public service job since October 2007 to qualify for loan forgiveness, including people who did not previously qualify. The program was created as part of an effort to “fix” the PSLF program as part of the Biden Administration’s commitment to alleviating student debt.
Fixing the Public Service Loan Forgiveness Program
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The new funding brings $180 billion in total student debt relief for nearly five million borrowers, the department said.
“Four years ago, the Biden-Harris Administration made a pledge to America’s teachers, service members, nurses, first responders, and other public servants that we would fix the broken Public Service Loan Forgiveness Program, and I’m proud to say that we delivered,” said U.S. Secretary of Education Miguel Cardona.
The relief announced Friday includes both borrowers who benefitted from the temporary PSLF waiver that ended in October 2022, as well as from regulatory improvements made to the program during the Biden Administration, the Department of Education said.
The PSLF program is now managed entirely by the Department of Education through StudentAid.gov, it said, rather than by a single loan servicer. This makes it easier for borrowers to track their progress toward forgiveness, it said Friday.
Around 31,000 New Jerseyans were enrolled in the PSLF program in 2022. More than 2,500 state residents had $167 million in debt canceled at an average waiver of over $65,000 per person that year, Murphy said at a 2022 event held to publicize the pandemic-era limited PSLF waiver in The College of New Jersey.
The state-run New Jersey Higher Education Student Assistance Authority declined to comment on the federally run program. The Biden administration did not immediately respond to request for comment.
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