On Thursday, the Biden administration revealed plans to erase $1.2 billion in student debt for 35,000 public service workers.
This action comes as a result of recent improvements to the Public Service Loan Forgiveness (PSLF) program. Education Secretary Miguel Cardona lauded the move, stating, “The Biden-Harris administration continues its historic efforts to alleviate student debt burdens by implementing crucial and long-awaited enhancements to the Public Service Loan Forgiveness Program.”
Established in 2007 under President George W. Bush, the PSLF program allows certain non-profit and government employees to have their federal student loans forgiven after ten years of payments. However, the program has been riddled with issues, making it difficult for many qualified borrowers to obtain relief. Many found themselves disqualified due to technicalities such as loan type or repayment plan.
The Biden administration addressed these concerns by offering borrowers another opportunity to qualify, provided they had been making payments and working for eligible employers. A temporary waiver, which ended in October 2022, allowed borrowers to consolidate loans and receive credit for previously ineligible periods.
According to the Education Department, the Biden administration has now cleared $69.2 billion in student debt for 946,000 borrowers through PSLF. This is a stark contrast to the mere 7,000 individuals who received relief before Biden took office.
Following the Supreme Court’s rejection of a broader debt cancellation plan last summer, the department explored its existing authority to reduce borrower balances. Through various improvements to troubled loan relief programs, the administration has approved nearly $169 billion in loan forgiveness for about 4.8 million people.
Thursday’s announcement, while significant, involved smaller numbers compared to previous relief waves. This reduction may be attributed to recent legal challenges against the Education Department’s new SAVE repayment plan, which had accelerated loan forgiveness for many borrowers.
In late June, federal judges in Kansas and Missouri temporarily blocked key aspects of SAVE after several states argued that the department had exceeded its authority, potentially circumventing the Supreme Court’s earlier decision on debt forgiveness.
