The Biden administration announced Friday that around 55,000 student loan borrowers will have their loans forgiven, totaling roughly $4.3 billion in relief. This is the latest wave of student loan forgiveness under a program designed to help public service workers.
Key Facts
Borrowers enrolling in the Public Service Loan Forgiveness Program (PSLF) will have their student loans forgiven, the Education Department announced Friday.
The program is intended to provide debt relief to people working in public service, such as teachers, nurses, social workers, first responders, service members, and others who have made at least ten years of payments.
Some borrowers who participated in a temporary waiver under PSLF in 2022, which allowed them to obtain credit for previously ineligible periods, also received relief, according to the government.
This relief is the result of “significant fixes” to the program by the Biden administration, which introduced an online application earlier this year allowing borrowers to request relief directly, following the program’s association with lengthy delays or challenges for borrowers to complete, according to the Education Department.
The PSLF program will be fully managed by the Education Department rather than a single loan service beginning in July 2024, making it easier for borrowers to track their progress toward debt reduction, according to the agency.
The Education Department did not specify whether eligible borrowers would be notified of their debt relief, although the agency previously stated that borrowers whose loans were forgiven did not need to take any additional measures to get it.
Big Number
$180 billion. According to the Education Department, the Biden administration has authorized this amount of student loan forgiveness for approximately 5 million Americans. PSLF has authorized around $78 billion in relief for somewhat more than 1 million borrowers, up from 7,000 borrowers who got debt relief through the program prior to the Biden administration.
Surprising Fact
Biden has rejected new plans to erase student debts for more than 38 million Americans, citing Education Department papers, as his administration is unlikely to approve relief before Donald Trump takes office in January, according to the Associated Press.
In the last weeks of the Biden administration, the agency will instead focus on other measures, including assisting at-risk borrowers in getting back on track, according to the documents.
Key Background
The PSLF, which was established in 2007, has been plagued by criticism for years due to relief delays and problems with program application completion.
According to the Consumer Financial Protection Bureau, only 25% of American workers were qualified for the program in 2013, and many were delayed or denied access to assistance by lending firms.
According to the Education Data Initiative, a research business that studies the United States’ education system, approximately 2.3% of PSLF applications were granted between 2013 and 2021.
Trump, the president-elect, pledged to end the program during his first administration and has allegedly branded Biden’s new efforts to eliminate student debt “vile.” According to Politico, Trump’s transition team is considering canceling Biden’s SAVE plan, which is a debt relief program aimed to assist borrowers facing financial difficulties.
