Biden approves $5.8 billion in additional student debt forgiveness

The Biden administration continued its efforts Thursday to expand student debt relief, canceling another $5.8 billion in federal loans for nearly 78,000 borrowers, including teachers, firefighters and others who work largely in the public sector .

To date, the government has canceled $143.6 billion in loans for nearly four million borrowers through various measures, remedies and federal relief programs. That’s the largest amount of student debt eliminated since the government began making loans more than 60 years ago, but it’s still far less than President Biden’s original proposal, which called for up to $400 billion in debt for 43 million borrowers would have forgiven, but was blocked by the Supreme Court.

The latest debt forgiveness applies to government and nonprofit employees in the Public Service Loan Forgiveness program, allowing their balances to be eliminated after 120 payments. The PSLF program, which has been plagued by administrative and other problems, has improved in recent years after the administration made a series of improvements.

“For too long, our nation’s teachers, nurses, social workers, firefighters and other public servants faced logistical challenges and trapdoors as they tried to access the debt relief they were entitled to under the law,” said Secretary of Education Miguel Cardona .

As of October 2021, more than 871,000 public sector and nonprofit workers have received debt forgiveness totaling $62.5 billion; prior to that, only 7,000 people had achieved forgiveness since the program was created over fifteen years ago.

Starting next week, borrowers set to receive the latest round of debt forgiveness through the PSLF program will receive an email notification from Mr. Biden — a reminder of his administration’s work just eight months before the presidential election.

Another 380,000 federal borrowers in the PSLF program, who are on track to have their loans forgiven in less than two years, will receive emails from the President informing them that they are eligible for debt forgiveness if they make their public continue to provide services within that period.

Many of these borrowers have been helped by programs which sought to address past mistakes that may have failed to credit individuals for payments. As a result, many borrowers received account adjustments or additional credits, bringing them closer to the repayment finish line.

Millions of borrowers with certain types of loans will still qualify for some of these adjustments, but they will need to apply to consolidate These loans must be eligible by April 30th.

“There are many people who need to consolidate before this deadline in order to take advantage and potentially access life-changing student loans,” said Abby Shafroth, co-director of advocacy at the National Consumer Law Center. This includes borrowers with private loans in the Federal Family and Education Loan, Perkins Loan and Health Education Assistance Loan programs, she added. (People with direct or Department of Education loans don’t need to do anything to have their payment numbers adjusted; this happens automatically.)

In addition to PSLF, the government has expanded assistance through a number of other federal relief programs: About 935,500 borrowers were approved for $45.6 billion in debt forgiveness through income-driven repayment plans, which base monthly payments on the borrower’s income and household size. After a certain repayment period, usually twenty years, the remaining debt is forgiven.

Another 1.3 million people had $22.5 billion wiped out by the federal credit protection program, which provides relief to those defrauded by their schools.

The government’s latest round of completed debt relief comes on the heels of the botched rollout of the new Free Application for Federal Student Aid (FAFSA), which was supposed to simplify the process. Instead, technical and other issues have caused delays, leaving colleges without the financial information about students they need to make aid offers. Students are in limbo and can’t decide where to go to college.