A program to cancel student loans for public officials has provided relief for more than 1 million people, up from only 7,000 approved individuals before the Biden administration updated the plan two years ago.
On Thursday (October 17th), President Joe Biden proudly announced this milestone achievement, stating that his government has honored its commitment to American teachers, firefighters, nurses, and other public officials. Despite legal challenges from Republican-led states that have halted their broader student loan forgiveness program, he celebrated the success.
In a statement, Biden said, “For too long, the government failed to fulfill its promises, but this administration is committed to changing that and as a result, over 1 million public service workers have now received the relief they are entitled to under the law.”
The Public Service Loan Forgiveness program was introduced in 2007, promising college graduates that their remaining federal student loans would be cleared after working for the government or non-profit organizations for 10 years. However, starting from 2017, the majority of applicants were denied due to complex and little-known eligibility rules.
A 2018 report from the Government Accountability Office (GAO) revealed that 99% of applicants were rejected, often because they were not enrolled in the correct loan repayment plan or had suspended payments due to deferment or forbearance, which did not count towards the required 10 years of public service.
The GAO criticized the Department of Education for not clarifying the rules.
The program sparked legal and political debates, with Democratic lawmakers urging the Trump administration to relax rules and uphold the spirit of the program. Then-Education Secretary Betsy DeVos countered that she was faithfully enforcing the rules passed by Congress.
In 2021, the Biden administration declared the program “broken” and granted temporary forgiveness, allowing borrowers to receive credit for past deferments or forbearances and making other changes. A year later, the Department of Education updated the rules to permanently broaden eligibility criteria.
Since then, as borrowers reached their 10-year mark, wave after wave of individuals have become eligible for forgiveness. Thursday saw another 60,000 people meeting this standard, bringing the total to over 1 million, compared to only 7,000 borrowers who received relief in the four years prior to Biden taking office.
The program has totalled $74 billion in student loan forgiveness for public sector workers.
According to a press release from the Department of Education, during Biden’s term, over $73 billion in loans have been forgiven through the 2007 initiative. Borrowers eligible for the latest round of forgiveness are expected to see their debts cleared in the coming days and weeks.
Education Secretary Miguel Cardona stated in a release, “I want to send a message to college students across the country: working in public service is not only a noble mission but also a reliable path to debt-free living within a decade.”
Facing legal challenges to its student loan program, the Biden administration is increasingly focusing on record loan cancellations through existing initiatives.
The government stated that around 5 million borrowers have had $175 billion in debt forgiven. Public Service Loan Forgiveness accounts for the largest share of debt relief, while other borrowers have had debts forgiven through income-driven repayment plans and a provision from 1994 aimed at providing relief to students defrauded by schools.
Biden promised during his campaign to cancel most student loans, but his proposal to forgive $40,000 in loans for 40 million Americans was rejected by the Supreme Court last year. He then instructed the Education Department to try again under different legal grounds. In August, the department introduced a standalone proposal called the “SAVE Plan,” an income-driven repayment plan allowing some low-income borrowers zero payments per month and debt cancellation after 10 years, but a judge in Missouri temporarily halted the program following objections raised by several Republican states.
Legal challenges may continue after the presidential election in November, with the winner deciding the fate of these initiatives as the federal government has the authority to uphold or rescind these efforts.
Democratic presidential candidate Jo Ling stated in a statement released on Thursday, “I will continue to work on reducing costs, making higher education more affordable, alleviating student debt burdens, and wholeheartedly focus on taking all necessary measures to create a favorable economic environment for every American.”
Republican presidential candidate Donald Trump had criticized the government’s push to forgive student debt, but has not elaborated on how he would handle existing loan forgiveness programs if elected.
(A reference was made to reports from the Associated Press and Bloomberg in this article)