WASHINGTON–More than 175,000 people are expected to receive about $10 billion in student loan debt cancellation through a government program designed to encourage people to work in public service, according to a new announcement from the Education Department.
That relief is being provided at the same time many are expecting President Biden is expected to announce as soon as today that the federal government will cancel $10,000 in debt for those borrowers who make less than $125,000 annually.
The debt cancellation for public service workers is part of the $32 billion in student loans the Biden administration already forgave through existing debt relief programs. Most recently, the federal government wiped nearly $4 billion in federal loans for roughly 208,000 borrowers who attended ITT Technical Institute from January 2005 to September 2016, as CUToday.info reported here.
“Today’s announcement that we’ve surpassed $10 billion in forgiveness for more than 175,000 public servants shows that the Biden-Harris administration’s efforts to cut red tape are turning the Public Service Loan Forgiveness program from a promise broken into a promise kept," Education Secretary Miguel Cardona said in a statement.
What Is Program?
When launched, the Public Service Loan Forgiveness program, which broadly applies to those working for the government or nonprofits, required borrowers to work full-time in a qualifying public service job and pay down their federal student loans for 10 years. But it ran into
In October, USA Today noted the Biden administration loosened many of the program’s rules, and borrowers now can get credit for most past payments so long as they can prove they were working in a qualifying job at the time. When the department first announced the waiver, it said it would erase the debt of 22,000 borrowers and expected another 27,000 might benefit from full cancellation, according to the report.
Window to Close?
According to USA Today, the window for applying while some rules are being waived closes October 31, but on Tuesday more than 100 lawmakers and dozens of trade groups signed a letter urging the administration to extend it through July 1, 2023. The Education Department is urging borrowers who think they might be eligible to apply before the waiver ends.
The Education Department said it will host four "days of action" in the coming weeks meant to "encourage public servants across the nation to take advantage of temporary changes" to the program. And Biden will send a letter to federal employees Wednesday informing them of the changes to the program and how they can apply.
As USA Today further reported, the potential announcement related to additional debt relief comes “within the smallest window of time borrowers have had to determine when their payments would resume.” The White House, under Biden and former President Trump, has extended the pause six times since March 2020, sometimes giving borrowers up to a month’s notice on whether their bills would be due.