The Biden administration continued its push to extend student debt relief Thursday, writing off an additional $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 administration has canceled $143.6 billion in loans for nearly four million borrowers through various actions, corrections, and federal relief programs. This is the largest amount of student debt that has been eliminated since the government began supporting loans more than six decades ago, but it is still far less than President Biden’s original proposal, which would have canceled up to $400 billion in debt for 43 million borrowers, but was blocked by the Supreme Court.
The most recent debt forgiveness applies to government and nonprofit employees in the Public Service Loan Forgiveness program, which can eliminate their 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 have faced logistical problems and pitfalls when trying to access the debt relief they are entitled to under the law,” said the education secretary. Miguel Cardona.
As of October 2021, more than 871,000 public service and nonprofit workers have received debt relief totaling $62.5 billion. Before that, just 7,000 had been pardoned since the program was created more than 15 years ago.
Starting next week, borrowers set to receive the latest round of debt relief 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.
An additional 380,000 federal borrowers in the PSLF program who are on track to have their loans forgiven in less than two years will receive an email from the president notifying them that they will be eligible for debt forgiveness if they continue their public service within that period.
Many of these borrowers have been helped by programs that 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, pushing them closer to the end of repayment.
Millions of borrowers with certain types of loans are still eligible for some of these adjustments, but will have to apply to consolidate those loans by April 30 to qualify.
“There are a lot of people who need to consolidate by this deadline to take advantage of and potentially access life-changing student loan relief,” said Abby Safroth, 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 loans held by the Department of Education do not need to do anything to adjust their payment number, it happens automatically.)
In addition to PSLF, the administration has extended relief through a variety of other federal relief programs: About 935,500 borrowers were approved for $45.6 billion in debt relief through income-driven repayment plans, which base monthly payments on the borrower’s earnings and size of the household. After a set repayment period, usually 20 years, any remaining debt is written off.
Another 1.3 million people were out $22.5 billion through the federal borrower defense program, which provides relief to those defrauded by their schools.
The administration’s latest round of comprehensive debt relief comes on the heels of the botched release 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 data they need to make aid offers. Students are left in limbo, unable to make decisions about where to attend college.
