Biden endorses finance relief of $175 billion for student loans for around 5 million individuals
Another round of student loan forgiveness was declared on Thursday, amplifying the total amnesty to over $175 billion for over 4.8 million individuals since President Joe Biden assumed office. This equates to approximately 11% of all outstanding federal student loan liabilities.
More than 1 million of these debtors have obtained loan relief via the Public Service Loan Forgiveness (PSLF) program, a scheme promising loan forgiveness to public-sector workers – such as teachers and nurses – after they’ve fulfilled 10 years of eligible payments.
The PSLF program has been active for over 15 years, but it was plagued with administrative issues.
“For far too long, the government faltered on its commitments, and only 7,000 individuals had ever received forgiveness through the PSLF program before Vice President (Kamala) Harris and I began serving,” Biden said in a statement.
“We dedicated ourselves to remedying that,” he implied.
Biden's Department of Education improved the qualification process for PSLF – a stark contrast to former President Donald Trump, who repeatedly advocated for abolishing the program when he was in the White House.
Thursday's announcement pertains to approximately 60,000 borrowers who are now certified for approximately $4.5 billion in debt relief under PSLF.
Harris Commits to Pursue Additional Student Loan Forgiveness Post Legal Challenges
Biden's singular, one-time borrower debt relief program was abolished by the Supreme Court last year. The initiative would have forgiven up to $20,000 of debt for numerous low- and middle-income borrowers. In 2022, 16 million borrowers received an email from the Biden administration stating they qualified for debt relief – but no relief was ever granted by the program.
This debt-relief initiative was estimated to cost more than $400 billion.
Harris was recently inquired about during an interview on the “Call Her Daddy” podcast by borrowers who were informed their loans would be forgiven but haven’t received relief.
“We're fighting, and I will continue fighting for student loan relief,” Harris said.
“It's a barrier to individuals thinking about starting a family, purchasing a home. We need to offer people relief,” she added.
More recent student loan relief initiatives, including a new repayment plan known as Saving on a Valuable Education (SAVE) that the Biden administration launched last year, are also entangled in litigation.
Lawsuits were filed by groups of Republican-led states, which contend that the Department of Education does not have the lawful authority to implement the costly debt-relief programs.
“And while Republican elected officials do everything in their power to impede millions of their own constituents from obtaining this much-needed financial relief, I will continue our efforts to reduce expenses, make higher education more affordable, and alleviate the burden of student debt,” Harris said in a statement on Thursday.
How Biden Keeps Canceling Student Loan Debt Despite Supreme Court Ruling
The student debt relief that Biden has provided – which is more than under any other president – has primarily stemmed from existing programs that target specific borrower categories. In certain cases, the administration has made it easier for borrowers to qualify for the scheme and enhanced application processing.
The Biden administration has made it easier for about 572,000 permanently disabled borrowers to receive the relief they are entitled to.
It has also forgiven loans for more than 1.6 million borrowers who were defrauded by their colleges. A backlog of these relief claims accumulated during the Trump administration, which worked to limit the program. These efforts ultimately proved futile.
The Biden administration made several changes to the PSLF program. Previously, many borrowers believed they qualified but subsequently discovered – following years of payments – that they were in the wrong type of repayment plan or had the wrong type of loan.
“People lost faith. They referred to PSLF as a cruel joke, a broken promise, and a nightmare. This is how individuals described the program to me when I became secretary,” said Education Secretary Miguel Cardona on a call with reporters.
The Biden administration is conducting a one-time audit of borrowers’ previous payments and rectifying any inaccurate counting, bringing many individuals closer to relief. It has also modified PSLF to allow borrowers to receive credit toward forgiveness on late, installment, or lump-sum payments.
The Public Service Loan Forgiveness (PSLF) program, which offers loan forgiveness to public-sector workers, has been a topic of politics for years. Despite being active for over 15 years, the program was only able to provide relief to 7,000 individuals before Vice President Harris and President Biden took office. (From the original text)
The PSLF program and other student loan relief initiatives have faced numerous legal challenges from Republican-led states, which argue that the Department of Education does not have the authority to implement these costly debt-relief programs. (Newly written)
