Biden approves $5.8 billion in student debt forgiveness for 78,000 borrowers

The Biden administration continued its efforts to expand student debt relief on Thursday, wiping out an additional $5.8 billion in federal loans for nearly 78,000 borrowers, including teachers, firefighters and other working people largely in the public sector.

To date, the administration has canceled $143.6 billion in loans for nearly four million borrowers through various federal actions, fixes and relief programs. It's the largest amount of student debt eliminated since the government began guaranteeing the loans more than sixty years ago, but it is still far lower than President Biden's initial proposal, which would have canceled up to $400 billion in debt for $43 million. borrowers but was blocked by the Supreme Court.

The latest debt forgiveness applies to government and nonprofit employees participating in the Public Service Loan Forgiveness Program, who can eliminate their balance after 120 payments. The PSLF program, plagued by administrative and other problems, has improved in recent years after the administration made a series of fixes.

“For too long, our nation's teachers, nurses, social workers, firefighters and other public servants have faced logistical problems and traps when trying to access the debt relief to which they are entitled under the law,” said Education Secretary Miguel Cardona.

Since October 2021, more than 871,000 government and nonprofit workers have benefited from debt forgiveness totaling $62.5 billion; before that, only 7,000 people had received forgiveness since the program's inception more than 15 years ago.

Starting next week, borrowers set to benefit from the latest round of debt forgiveness through the PSLF program will receive an email notification from Mr. Biden — a reminder of his commitment. the work of the administration just eight months before the presidential election.

An additional 380,000 federal PSLF program borrowers who are on track to have their loans forgiven in less than two years will receive emails from the President informing them that they will be eligible for debt forgiveness if they continue working in the public service during this period.

Many of these borrowers were helped by programs which attempted to correct past errors that may have failed to credit individuals' payments. As a result, many borrowers received account adjustments or additional credit, bringing them closer to the repayment finish line.

Millions of borrowers with certain types of loans are still eligible for some of these adjustments, but they will have to apply to consolidate these loans before April 30 to be eligible.

“Many people need to consolidate before this deadline to qualify and potentially access life-changing student loan relief,” said Abby Shafroth, co-director of advocacy at the National Consumer Law Center. They include borrowers benefiting from private loans in the Federal Family and Education Loan, the Perkins Loan and Health Education Assistance Loan programs, she added. (People receiving direct loans or loans held by the Department of Education do not need to do anything to have their payment tally adjusted; it happens automatically.)

In addition to PSLF, the administration has expanded relief through a variety of other federal aid programs: About 935,500 borrowers obtained $45.6 billion in debt forgiveness through repayment plans focused on income, which bases monthly payments on the borrower's income and household size. After a specified repayment period, usually 20 years, any remaining debt is forgiven.

An additional 1.3 million people saw $22.5 billion lost thanks to the federal borrower defense program, which provides relief to those who were defrauded by their schools.

The administration's latest round of debt relief comes on the heels of its failed deployment of the new Free Application for Federal Student Aid, or FAFSA, which was supposed to simplify the process. Instead, technical and other problems have created delays, leaving colleges without student financial information they need to make aid offers. Students are left in limbo, unable to decide where they will go to college.

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