Student Loan Forgiveness: Biden Cancels Another $1.2 Billion In Debt

Topline

About 35,000 borrowers will have their student loans forgiven, totaling another $1.2 billion in relief, the Biden administration announced Thursday, the latest round of student loan forgiveness under a program supporting public servants, which was recently updated to eliminate delays.

The Biden administration has cleared nearly $169 billion in student debt.

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Key Facts

Borrowers who enrolled in a temporary waiver under the Public Service Loan Forgiveness Program (PSLF) in 2022 and others who benefitted from recent “improvements” made to the program earlier this month will have their student debts canceled, the Education Department said.

The PSLF is designed to provide debt relief for public servants like teachers, nurses, firefighters and others.

The Education Department did not specify whether the affected borrowers would be notified, though the agency has previously said borrowers whose loans were forgiven don’t need to take additional steps to receive their debt relief.

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Big Number

$168.5 billion. That’s the total amount of student debt the Biden administration has canceled, affecting about 4.7 million Americans, according to the Education Department. About $69.2 billion in student debt has been canceled for 946,000 borrowers under PSLF. Only 7,000 borrowers received debt relief through the program before the Biden administration, the Education Department said.

Key Background

The PSLF was created under the George W. Bush administration in 2007, though the program often included lengthy delays or challenges for borrowers to complete. The program was updated earlier this month, allowing borrowers to apply directly online. In 2013, the Consumer Financial Protection Bureau estimated about a quarter of American workers were eligible under the program, though the agency later reported loan servicers delaying or denying access to relief under PSLF. The Education Department started receiving PSLF applications in 2017, though reportedly fewer than 1,000 people of the 16,000 who applied were granted eligibility. The Biden administration announced a PSLF waiver in 2021, allowing some borrowers to get credit for previously ineligible periods.

What To Watch For

Three states requested the Supreme Court to block President Joe Biden’s Saving on Valuable Education (SAVE) plan earlier this month. The plan was blocked by federal judges in Missouri and Kansas last month, though an appeals court put the ruling on hold in Kansas after an appeal by the Biden administration. It’s not immediately clear when or if the Supreme Court will issue a ruling.