Biden administration cancels another $1.2 billion in student loans for public service workers

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This article was published 18/07/2024 (508 days ago), so information in it may no longer be current.

The Biden administration is cancelling an additional $1.2 billion in student loans for borrowers who work in public service through changes to an existing forgiveness program.

The relief for roughly 35,000 borrowers was announced Thursday by the Education Department and made through changes to the Public Service Loan Forgiveness program, which benefits workers such as teachers, nurses and firefighters. Those qualifying for forgiveness have their remaining loan balance eliminated after making 120 qualifying monthly payments.

“These 35,000 borrowers approved for forgiveness today are public service workers — teachers, nurses, law enforcement officials, and first responders who have dedicated their lives to strengthening their communities, and because of the fixes we made to Public Service Loan Forgiveness, they will now have more breathing room to support themselves and their families,” Biden said in a statement.

The public service forgiveness program was created by Congress in 2007, but many borrowers were not able to get the cancellation they had worked towards due to strict rules and mistakes by loan servicers in tallying their payments. Under the Biden administration, some rules were adjusted and retroactively gave many borrowers credit toward their 10 years of payments.

The announcement comes amid legal back and forth over the administration’s larger plans for student loan forgiveness, which faces challenges from Republican-led states. In June, judges in two federal cases opposing the new SAVE plan, which included lowered monthly payments and a faster path to forgiveness, issued injunctions stopping the plan from going into effect.

But shortly after, the 10th Circuit Court of Appeals issued a stay in one of the lawsuits, allowing the Education Department to move ahead with lowered monthly payments.

Biden’s original plan for one-time debt cancellation was overturned by the Supreme Court, which said the move overstepped the president’s authority.

With this latest round of loan cancellation, the administration has now forgiven $168.5 billion in student debt for 4.76 million borrowers, including $69.2 billion for 946,000 million borrowers through the public service forgiveness program.

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