The Biden Administration Cancels Nearly $6 Billion of Debt for Public Service Workers
On March 21, 2024, more public servants met the threshold to benefit from President Biden’s ameliorated Public Service Loan Forgiveness (PSLF) program. Through the updated program, the administration canceled $5.8 billion in student loan debt for 77,700 borrowers who have served as teachers, firefighters and nurses.
In a White House statement, President Biden explained “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.”
Almost 400,000 additional borrowers will receive a notice that they are only a year or two away from having their loans forgiven if they continue making payments as well as working in public service jobs.
The PSLF required public servants to make ten years of monthly payments in order to be eligible for debt cancellation. However, the fine print made borrowers ineligible if they made late payments or were in “deferment for things like cancer treatment or economic hardship could derail borrowers in the program,” explained Sequoia Carillo.
In 2022, the PSLF program underwent key regulation changes that expanded the rules for qualified borrowers to seek forgiveness. Among these changes were that borrowers could receive credit towards a qualifying payment if payments were made late, in installments or in a lump sum. Full-time employment became defined as thirty hours a week. Additionally, more situations in which borrowers deferred or paused their payments were now included in the new forgiveness terms.
The re-configured PSLF program has been used in place of the President’s broader $400 billion student loan forgiveness program that was struck down by the Supreme Court. As a result of improvements to the PSLF program, student debt has been canceled for over 870,000 public service borrowers. In total, “nearly four million Americans have had their student debt canceled under my Administration,” explained Biden in the White House statement.