Biden administration to cancel $5.8 billion in student debt for public servants

By Jillian Berman

Borrowers eligible for the relief have been working for the government or certain nonprofits for at least 10 years

Nearly 78,000 student-loan borrowers who have worked in public service for at least 10 years will have their student debt cancelled, the Biden administration said Thursday.

The 77,700 borrowers who will receive $5.8 billion in relief are part of the Public Service Loan Forgiveness program, an initiative that was signed into law in 2007. It allows borrowers who work for the government and certain nonprofits for at least 10 years, and pay their loans during that time, to have the remainder of their debt cancelled.

Thursday's announcement is the latest in the Biden administration's efforts to smooth the path towards student-debt forgiveness for borrowers who are eligible for relief through existing programs but were previously stymied by technicalities. So far, the Department of Education has approved $143.6 billion in debt relief for 3.96 million borrowers through these initiatives, officials said Thursday.

Borrowers and advocates complained for years about challenges accessing Public Service Loan Forgiveness. People who appeared to meet the spirit of the law - they worked in public service for more than a decade and were in repayment on their loans during that time - regularly faced denials because they had the wrong type of federal loan or were using an ineligible repayment plan.

The Biden administration has made changes to the program over the past few years in an effort to help more borrowers receive relief. So far, the Biden-era Department of Education has approved $62.5 billion for 871,000 borrowers under PSLF.

"For too long, our nation's teachers, nurses, social workers, firefighters and other public servants faced logistical troubles and trap doors when they tried to access the debt relief they were entitled to under the law," Secretary of Education Miguel Cardona said in a statement announcing the debt relief.

The announcement highlights how the Biden administration is "taking further steps not only to fix those trap doors, but also to expand opportunity to many more Americans," he said.

Starting next week, the Biden administration will email borrowers who are part of Thursday's announcement congratulating them on receiving relief. In addition, borrowers who will have their debt cancelled in two years or less through PSLF will also receive an email encouraging them to continue their work in public service.

"Thank you for the work you're doing to strengthen your communities, and keep it up!" the emails to borrowers who are nearing the end of their 10-year commitment read.

The messages also say the White House is looking for borrowers to share what student-debt relief has meant for them and to encourage more borrowers to sign up for PSLF. Biden and his administration have been touting their efforts around student-debt forgiveness, including during the State of the Union. The relief has come through revamping existing initiatives, including income-driven repayment and a program that cancels debt for borrowers who are severely disabled.

Still, the debt-cancellation efforts haven't been without challenges. Some borrowers have received messaging that their debt is eligible for cancellation but waited weeks or months to actually receive it. More than 50,000 borrowers who were scammed by their schools and promised debt relief by the end of January through a settlement with the Biden administration still haven't received it. They're asking a court to push officials to actually discharge the debt.

The debt cancellation the Biden administration has approved for public servants, former for-profit-college students and others, is distinct from the president's mass debt-relief plan that was struck down by the Supreme Court last year. That proposal would have cancelled up to $20,000 in student debt for a wide swath of borrowers regardless of their job or payment plan.

Biden vowed to find another route for mass debt relief and administration officials have promised to cancel as much debt as possible for as many borrowers as possible. The Department of Education is in the midst of a rulemaking process that will determine who will be eligible for a new mass student loan-forgiveness program. It will likely include borrowers experiencing hardship repaying their loans, among other categories. Still, it's possible it will face legal challenges.

-Jillian Berman

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03-21-24 0936ET

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