Student loans

30,000 borrowers will have their student loans canceled

Thousands more people could soon see their student loan balances wiped out as the Biden administration works to identify borrowers eligible for the Public Service Student Loan Forgiveness. It is the latest effort by the Department of Education to relieve borrowers burdened with billions of dollars in student loan debt.

The number of student borrowers eligible for forgiveness under the Civil Service Loan Forgiveness Scheme stands at 100,000, the Department for Education said on Wednesday, of the roughly 550,000 they expected to get ultimately an earlier discount after changes to the program last fall. The last group amounts to approximately $6.2 billion in discharge loans.

“Our country’s public service workers must be able to rely on the promise of public service loan forgiveness. The Biden-Harris administration is delivering on that promise by helping more and more eligible borrowers get the cancellation of the balance of their loan”, said Education Secretary Miguel Cardona. “Today’s PSLF announcement means that more of our teachers, nurses, first responders, service members and many other dedicated public service workers will benefit from significant relief.”

The Public Service Loan Cancellation Program cancels direct loan balances for eligible borrowers who are employed full-time in government or non-profit organizations once they have made 120 qualifying monthly payments on loans under qualified repayment plans. The program was part of a larger set of education laws signed into law by President George W. Bush in 2007.

In October, the Biden administration announced a redesign of the program allowing borrowers to receive credit for past loan repayment periods that might not otherwise have qualified. Before the rule changes, only 16,000 borrowers had never been forgiven through the program. By January, the changes had helped more than 70,000 borrowers qualify for forgiveness totaling nearly $5 billion.

The total of 100,000 borrowers now identified as eligible for forgiveness through the public service program is the latest effort in an ongoing push by the Biden administration to help student borrowers find relief.

According to the Department of Education, some 675,000 borrowers saw more than $15 billion in federal student loans discharged during President Joe Biden’s first year in office. This included $1.5 billion to borrowers who were found to have been exploited by their institutions; $7 billion for more than 400,000 permanently disabled borrowers; and $1.26 billion for more than 100,000 borrowers who attended the now closed ITT Technical Institute.

The Biden administration also extended the freeze on federal student loan repayments amid the more than year-long coronavirus pandemic until May 2022.

But while the Biden administration has stepped up relief for some student borrowers, some advocates and lawmakers say efforts so far don’t go far enough. There is over $1.7 trillion in student loan debt in the United States. More than 43 million borrowers hold federal student loan debt.

Democrats, including Senate Majority Leader Chuck Schumer and Senator Elizabeth Warren of Massachusetts, have called on the Biden administration to forgive $50,000 in student loan debt.

Mr Biden has expressed general support for canceling student loan debt, but has urged Congress to send him legislation. But Democratic lawmakers calling for student loan debt cancellation argue that Biden has the power to unilaterally cancel it.

Amid mounting pressure last year, the Biden administration said it would review the president’s power to forgive student loan debt, but officials have yet to make an announcement.