Biden Announces $5.8 Billion Student Loan Forgiveness Program

Biden will forgive approximately 78,000 public sector employees’ $5.8 billion in student loan debt.

TFD – President Biden’s recent announcement of a $5.8 billion student loan forgiveness program is set to benefit public sector employees and future borrowers.

Nearly 78,000 employees in the public sector will get $5.8 billion in student loan debt forgiveness, as announced by President Joe Biden on Thursday. The borrowers will receive congrats emails the following week.

And in addition, Biden will be sending out “keep it up!” emails to 380,000 borrowers who might qualify for debt relief in the future year or two.

An example email from the White House said, “If you continue your career in public service, you’re on track to get your eligible student loans forgiven through Public Service Loan Forgiveness in less than two years.”

After making monthly payments for ten years, qualifying borrowers—such as teachers, social workers, some doctors and nurses, and government attorneys—are eligible for the forgiveness program, also known as PSLF.

The emails are being released at a time when the Biden administration is keen to remind voters in an election year that, despite the Supreme Court’s decision to overturn its expansive student loan forgiveness program last year, it has approved more student debt cancellation than any previous president.

That program would have canceled up to $20,000 for low- and middle-income borrowers, for an estimated total of $430 billion of debt relief.

As an alternative, the Biden administration has eliminated over 4 million borrowers’ federal student loan debt to the tune of $144 billion, primarily through already-existing programs that specifically target certain borrower demographics.

When a wave of debt relief worth roughly $1.2 billion was revealed last month, Biden began sending emails to borrowers who are receiving forgiveness of their student loans. It’s possible that borrowers who have already had debt forgiven did not receive an email from Biden.

PSLF growth

Although Congress established PSLF in 2007, it had numerous administrative issues prior to Biden taking office. The White House claimed that only 7,000 people have ever benefited from debt relief under the program.

In order to increase eligibility and allow some borrowers to earn credit for past payments that would not have otherwise qualified for PSLF, Biden implemented a temporary waiver in 2021.

In addition, the Biden administration is performing a one-time review of previous borrower payments in order to address what officials have referred to as “past administrative failures.” By July, the agency hopes to have the recount finished.

Regardless of the repayment plan they were involved in at the time, the Department of Education states that, in general, the recall will grant borrowers credit toward forgiveness for those months in which they made payments. Recounts are especially beneficial to borrowers who may have been misled into a lengthy period of forbearance—during which they ceased paying payments—by their student loan servicing business.

Additional student loan relief initiatives

Before and after the Supreme Court’s decision, Biden has been leveraging already-existing student debt forgiveness programs to provide relief to particular borrower categories.

For instance, debtors who were duped by their college can receive assistance under the borrower defense to repayment program. Additionally, automatic releases for borrowers who are completely and permanently handicapped were implemented under the Biden administration.

Furthermore, more than 153,000 borrowers have already benefited from the cancellation of their student loans through Biden’s new income-driven repayment plan, SAVE (Saving on a Valuable Education). That idea eliminates the leftover amounts on federal student loans for borrowers who borrowed no more than $12,000 and who have been making payments for a minimum of ten years.

These programs are all perpetual, so they will assist qualified borrowers both now and down the road.