78,000 more public workers are getting student loans canceled through Biden administration changes
WASHINGTON — Another 78,000 Americans will have their federal student loans canceled under a program that helps teachers, nurses, firefighters and other government employees, the Biden administration announced Thursday.
The Department of Education is canceling borrowers’ loans because they have made 10 years of repayments while working in the public service, making them eligible for relief under the Public Service Loan Forgiveness program.
“These public sector employees have dedicated their careers to serving their communities, but due to past administrative failures, they never received the relief they were entitled to under the law,” President Joe Biden said in a statement.
Congress created the program in 2007, but strict regulations and missteps by student loan servicers prevented many borrowers from getting the cancellation they promised. The Biden administration has relaxed some rules and given many borrowers retroactive credit for their 10-year payments.
Through these actions, the Biden administration has canceled loans for more than 871,000 public sector workers. Previously, around 7,000 borrowers had successfully canceled their loans.
The latest round of forgiveness will cancel approximately $5.8 billion in federal student loans.
Starting next week, those who receive the forgiveness will receive an email from Biden congratulating them on their relief. A message from the Democratic president, who is running for re-election, will also be sent to 380,000 borrowers who fall under the program within two years of forgiveness.
“I hope you continue the important work of serving your community,” the message says, “and if you do, you can have your remaining student loans forgiven through Public Service Loan Forgiveness in less than two years.”
The program was created to encourage Americans to work in the public sector, including teachers, firefighters, nurses, government employees and those who work for nonprofit organizations. After ten years of making monthly payments on their loans, the program promised to erase the rest.
But when the first wave of workers reached the ten-year mark, the vast majority were rejected. Many did not realize that their loans did not qualify under the program’s rules, and many had been inappropriately forced into forbearance by their loan servicers, temporarily halting payments and halting their progress toward cancellation.
In 2021, the Biden administration offered a one-time fix that gave borrowers retroactive credit for past payments, even if they had been forbearing or had an ineligible loan. Later, a number of rules were finally relaxed. For example, payments made more than 15 days after the due date were previously not counted towards the 10 years, but the new rules do count payments that are late or made in installments.
“Today, more than 100 times more borrowers qualify for PSLF than there were at the start of the administration,” Education Secretary Miguel Cardona said Thursday.
The Biden administration says it has now canceled nearly $144 billion in federal student loans through the Public Service Program and others, including a program for borrowers defrauded by their colleges.
Biden is separately pushing for a broader cancellation for borrowers who have been making payments for decades and those who attended colleges seen as having little value to graduates, among others.
The Department of Education is pursuing that plan through a federal rulemaking process after the U.S. Supreme Court blocked Biden’s earlier attempt at widespread cancellation.
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