CHANDLER, ARIZONA – MARCH 20: U.S. President Joe Biden delivers a speech on March 20, 2024 in Chandler, … [+]
President Joe Biden last week approved latest student loan forgiveness for 1000’s of teachers, nurses, charity staff and other borrowers who’ve dedicated their careers to public service work. After this latest wave of approvals, the overall variety of discharge approvals under this popular loan forgiveness program has increased from just a couple of thousand before 2021 to just about 900,000, based on the Department of Education.
“From day one, I promised to fix broken student loan programs and ensure that higher education is a ticket to the middle class, not a barrier to opportunity,” President Biden said yesterday in a post on X, the platform formerly generally known as Twitter . “I’m not giving in.”
Borrowers must know this:
Biden’s most up-to-date student loan forgiveness totals $5.8 billion and over $62 billion in total
Last week’s announcement shows that the Biden administration has approved nearly $6 billion in student loan forgiveness for nearly 77,000 borrowers. This debt relief was not achieved through unilateral executive motion; Rather, the administration has implemented a series of improvements to the long-troubled public service lending program by updating regulations and streamlining the applying process.
The PSLF program is designed to incentivize work in underserved and underpaid fields that always require advanced degrees. This can include teaching, healthcare, community service, and state and native government. Borrowers who use PSLF can receive student loan forgiveness after making 120 “qualified payments,” which is 10 years.
However, because the program’s inception in 2007 (the enabling laws was passed on a bipartisan basis and signed by President Bush), the PSLF program has been plagued with problems and obstacles which have hampered borrowers’ attempts to acquire relief. Complicated eligibility requirements, misinformation, poor loan servicing, and inadequate oversight resulted in a convoluted process that always resulted in borrowers being rejected, even for many who had done all the things accurately based on program requirements. Only about 7,000 borrowers had actually received student loan forgiveness under PSLF as of 2020.
But the Biden administration has taken significant steps to enhance the PSLF program. The administration issued temporary waivers to deal with the impact of long-standing problems and to offer borrowers with a time frame before loan forgiveness that had not previously been considered. The Department of Education has also updated regulations to make this system fairer and more equitable. And officials created Online tools Designed to make it easier for borrowers to use for student loan forgiveness through this system.
Biden’s Efforts to “Fix” PSLF Student Loan Forgiveness Are Paying Off
The results of the Biden administration’s efforts have been stunning. In just a couple of years, this system’s denial rate went from 99% and just a couple of thousand approvals to just about 900,000 borrowers receiving over $60 billion in student loan forgiveness.
“Total relief from PSLF is $62.5 billion for 871,000 borrowers as of October 2021,” based on Department of Education data published last week. “Before the Biden-Harris Administration corrected PSLF, only about 7,000 borrowers had ever received forgiveness.”
Given that nurses, teachers, firefighters and other borrowers serving the general public “faced logistical difficulties and trapdoors as they attempted to access the debt relief to which they were legally entitled,” the approvals have for student loan forgiveness under PSLF increased 100-fold from 2021 to 2024, Education Secretary Miguel Cardona said in an announcement last week. “Today, more than 100 times more borrowers are eligible for PSLF than when the administration began. The Biden administration is turning a promise broken under our predecessor into a promise kept.”
However, the system continues to be not perfect and PSLF borrowers are still struggling. These include ongoing loan processing issues, payment miscalculations and processing delays. Senate Democrats recently called for an investigation into MOHELA, the Department of Education’s contracted loan servicer for the PSLF program, after reports that the organization kept borrowers away from customer support representatives, resulting in hours of wait and no resolution to borrowers’ problems.
The latest PSLF student loan forgiveness opportunity ends next month
One of the Biden administration’s key efforts to repair the PSLF program is coming to an end next month.
The IDR Account Adjustment is a short lived program that permits borrowers to receive credit toward PSLF for student loan forgiveness for periods that will not have previously been counted. This may include many past repayment periods dating back to October 2007, but in addition certain periods of deferment and forbearance. The “credit” can be used for 20- or 25-year student loan forgiveness on income-driven repayment plans.
Borrowers with non-direct federal student loans (e.g., FFEL loans) would wish to use to consolidate their loans through the Federal Direct Consolidation Program before April 30 to be eligible for PSLF account adjustment advantages. Additionally, borrowers applying for loan forgiveness through PSLF could be required to certify their employment by completing an internet employment certification process.
