The Biden administration continued its effort to extend student debt relief on Thursday, eliminating an additional $5.8 billion in federal loans for nearly 78,000 borrowers, including teachers, firefighters and others who largely work in the public sector.
To date, the administration has canceled $143.6 billion in loans for nearly four million borrowers through various actions, settlements and federal relief programs. It's the largest amount of student debt eliminated since the government began backing loans more than six decades ago, but it's still far less than President Biden's initial proposal, which would have canceled up to $400 billion in debt for 43 million. of borrowers, but was blocked by the Supreme Court.
The latest debt eliminations apply to government and nonprofit employees in the Public Service Loan Forgiveness program, which can eliminate your balance after 120 payments. The PSLF program, which was plagued by administrative and other problems, has improved in recent years after the administration made a series of fixes.
“For too long, our nation's teachers, nurses, social workers, firefighters and other public servants faced logistical problems and trap doors when trying to access the debt relief they were entitled to under the law,” said Secretary of Education Miguel Cardona.
Since October 2021, more than 871,000 public service and nonprofit workers have received debt cancellation totaling $62.5 billion; Before that, only 7,000 had achieved forgiveness since the program was created more than 15 years ago.
Starting next week, borrowers receiving the latest round of debt cancellation through the PSLF program will receive an email notification from 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 notifying them that they will be eligible for debt cancellation if they continue their public service work within that period. .
Many of these borrowers have received help from programs which attempted to address past errors that may not have credited payments to people. As a result, many borrowers received adjustments to their accounts or additional credit, bringing them closer to their payment goal.
Millions of borrowers with certain types of loans are still eligible for some of those adjustments, but they will need apply to consolidate those loans by April 30 to qualify.
“There are many people who need to consolidate before this deadline to benefit and potentially access life-changing student loan relief,” said Abby Shafroth, co-director of advocacy at the National Consumer Law Center. They include borrowers with private loans in the Federal Family and Education Loan, Perkins Loan and Health Education Assistance Loan, he added. (People with Direct Loans or Department of Education loans don't need to do anything to adjust their payment counts; it happens automatically.)
In addition to PSLF, the administration has expanded relief through a variety of other federal relief programs: About 935,500 borrowers were approved to pay off $45.6 billion of their debt through income-driven repayment plans, They base monthly payments on the borrower's income and household size. After a set repayment period, usually 20 years, any remaining debt is paid off.
Another 1.3 million people lost $22.5 billion through the federal borrower defense program, which provides relief to those defrauded by their schools.
The administration's latest round of debt relief comes on the heels of its botched launch of the new Free Application for Federal Student Aid, or FAFSA, which was supposed to simplify the process. Instead, technical and other problems have created delays, leaving colleges without the student financial information they need to make aid offers. Students have been left in limbo, unable to make decisions about where they will attend college.
