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HomeloansBiden forgives student loans for 78,000 public service workers

Biden forgives student loans for 78,000 public service workers

In a statement, the White House said the debt being forgiven totals nearly $6 billion.
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WASHINGTON — The Biden administration announced Thursday it would cancel the student loans of 78,000 people working as teachers, nurses, firefighters and in other public service jobs as part of the president’s initiative to lower student loan debt.
The Education Department is canceling the borrowers’ loans because they reached 10 years of payments while working in public service, making them eligible for relief under the Public Service Loan Forgiveness program.
Congress created the program in 2007, but rigid rules and missteps by student loan servicers left many borrowers unable to get the cancellation they were promised. The Biden administration loosened some of the rules and retroactively gave many borrowers credit toward their 10 years of payments.
“These public service workers have dedicated their careers to serving their communities, but because of past administrative failures, never got the relief they were entitled to under the law,” the White House said in the announcement.
Starting next week, those receiving the forgiveness will get an email from Biden congratulating them on their relief. A message from the Democratic president, who’s running for reelection, will also be sent to 380,000 borrowers who are within two years of forgiveness under the program.
“I hope you continue the important work of serving your community,” the message says, “and if you do, in less than two years you could get your remaining student loans forgiven through Public Service Loan Forgiveness.”
The program was created to encourage Americans to work in public service, including teachers, firefighters, nurses, government employees and those who work for nonprofit groups. After 10 years of monthly payments on their loans, the program promised to erase the remainder.
But when the first wave of workers hit their 10-year mark, the vast majority were rejected. Many didn’t realize their loans weren’t eligible under the program’s rules, and many had been improperly steered into forbearance by their loan servicers, putting a temporary pause on payments and halting their progress toward cancellation.
In 2021, the Biden administration offered a one-time fix that retroactively gave borrowers credit for past payments even if they had been in forbearance or had an ineligible loan. It later loosened some of the rules permanently. Payments made more than 15 days after their due date previously weren’t counted toward the 10 years, for example, but the new rules count payments that are late or made in installments.
“Today, more than 100 times more borrowers are eligible for PSLF than there were at the beginning of the Administration,” Education Secretary Miguel Cardona said Thursday.
Additionally, around 380,000 borrowers who may be eligible for relief within the next two years will also be getting emails to tell them they’re on track to have their student loans forgiven, CNBC and CNN reported.
President Joe Biden has on numerous occasions cut federal student loan debt in what his administration says is simply a correction of how borrowing from the federal government is supposed to work.
In 2023, the Supreme Court struck down a nationwide debt forgiveness plan Biden put forward by executive order. Since then, he has made smaller, more targeted moves to eliminate student debt.
“In the wake of the Supreme Court’s decision on my Administration’s original student debt relief plan, we are continuing to pursue an alternative path to deliver student debt relief to as many borrowers as possible as quickly as possible,” Biden said in a statement.
One of the most ambitious of those moves is the administration’s push for the SAVE plan, a retooled repayment plan for federal borrowers that the Biden administration has called a “student loan safety net,” but opponents have targeted as a backdoor attempt at free college.
The plan offers some of the most lenient terms ever. Interest doesn’t pile up as long as borrowers make regular payments, no matter what amount those payments are. Millions of people under the program would have monthly payments reduced to $0. And in as little as 10 years, any remaining debt will be canceled.
In February, Biden announced that around 153,000 borrowers would have their student loans canceled six months early.

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