The Biden administration has announced the cancellation of an additional $1.2 billion in student loans for approximately 35,000 borrowers who work in public service. This relief comes as a result of changes made to the existing Public Service Loan Forgiveness program, which benefits workers such as teachers, nurses, and firefighters. Under this program, borrowers have their remaining loan balance eliminated after making 120 qualifying monthly payments.
President Biden expressed his support for the forgiveness, stating that these borrowers, who are public service workers, have dedicated their lives to strengthening their communities. The changes made to the Public Service Loan Forgiveness program have provided these individuals with more financial flexibility to support themselves and their families.
The Public Service Loan Forgiveness program was established by Congress in 2007, but many borrowers faced challenges in receiving the cancellation they had worked towards due to strict rules and errors made by loan servicers in tracking their payments. The Biden administration made adjustments to some of the rules, allowing many borrowers to receive credit retroactively towards their 10 years of payments.
Despite legal challenges to the administration's broader student loan forgiveness plans, the Education Department has moved forward with initiatives such as the SAVE plan, which includes reduced monthly payments and expedited forgiveness. While some federal cases have issued injunctions against these plans, the 10th Circuit Court of Appeals recently granted a stay, enabling the Education Department to proceed with the lowered monthly payments.
President Biden's initial proposal for one-time debt cancellation was overturned by the Supreme Court, which deemed it as exceeding the president's authority. With this latest round of loan forgiveness, the administration has now forgiven a total of $168.5 billion in student debt for 4.76 million borrowers, including $69.2 billion for 946,000 borrowers through the public service forgiveness program.
