President Joe Biden announced another round of student loan debt forgiveness Thursday, totaling $1.2 billion for 35,000 public-sector workers including teachers, nurses and firefighters.
The borrowers qualify for the debt relief through the Public Service Loan Forgiveness (PSLF) program, which was created nearly two decades ago and expanded by the Biden administration’s efforts to make it easier to qualify.
The administration is eager to show how it has canceled more federal student loan debt than any prior administration – now totaling more than $168 billion for nearly 4.8 million Americans – despite its signature, one-time student loan forgiveness program getting knocked down by the Supreme Court last year.
Thursday’s announcement comes as the Biden administration is fighting two legal challenges -- filed by several Republican-led states – to a separate student loan repayment plan that it launched last year, known as SAVE (Saving on a Valuable Education). The plan offers the most generous repayment terms for low-income Americans by reducing their monthly payments and creating a faster path to debt relief.
The Supreme Court is expected to decide soon whether to block part of the SAVE plan while the matter is fully litigated.
“From day one of my administration, I promised to fight to ensure higher education is a ticket to the middle class, not a barrier to opportunity. I will never stop working to make higher education affordable – no matter how many times Republican elected officials try to stop us,” Biden said in a statement.
Student loan forgiveness for public-sector workers
PSLF was created by Congress in 2007 but was plagued with administrative problems before Biden took office. Just 7,000 people had ever received debt relief under the program previously, according to the White House.
Under PSLF, borrowers are eligible for student debt cancellation after making 10 years of monthly payments while working in a qualifying public-sector job for a non-profit or the government.
In 2021, Biden put a temporary waiver in place, expanding eligibility so that some borrowers could retroactively receive credit for past payments that did not otherwise qualify for PSLF.
The Biden administration is also conducting a one-time recount of borrowers’ past payments to fix what officials have called “past administrative failures.”
Generally, the recount will give borrowers credit toward forgiveness for any months in which they made payments regardless of what repayment plan they were enrolled in at the time, according to the Department of Education. The recount especially helps borrowers who may have been inappropriately steered by their student loan servicing company into a long-term forbearance, a period in which they stopped making payments.
Biden’s other student debt relief efforts
Biden has been using existing student loan forgiveness programs to deliver relief to certain groups of borrowers.
The borrower defense to repayment program delivers relief to people who were defrauded by their college, for example. The Biden administration also made discharges automatic for borrowers who are totally and permanently disabled.
None of these programs expire, meaning they will help qualifying borrowers now and in the future.
Since last fall, the Biden administration has also been working on a set of new student loan forgiveness proposals. For example, those whose student loan balances are bigger than what they initially borrowed could see their accumulated interest wiped way. Those proposals have yet to be finalized, but some could go into effect as soon as this fall.