Biden administration cancels student loans for one million public employees

The student loan forgiveness program for public employees has eased the situation for more than a million Americans, up from 7,000 before the president’s administration. Joe Biden Two years ago, the initiative improved.

The president announced the milestone Thursday as his administration reneges on a promise to the nation’s teachers, firefighters, nurses and other public workers. He celebrated the brand regardless of the fact that the public plan has been stalled by the courts after legal challenges mounted by Republican-governed states.

“For too long, the government has failed to live up to its promises,” Biden said in a statement. “We were determined to fix it, and thanks to our government’s actions, more than a million utility workers now have the help they deserve under the law.”

The Public Service Loan Forgiveness Program was created in 2007 with the promise of college graduates having their federal student loans forgiven after 10 years of government or nonprofit employment. But since 2017, most of the applicants have been rejected due to complicated and unclear eligibility rules.

According to a 2018 report by the Government Accountability Office (GAO), 99% of applications were rejected, mostly because they did not have a valid loan repayment plan or because their dues were temporarily suspended or deferred for 10 years of public service.

The GAO accused the Department of Education of not developing clear standards.

The program has been the subject of political and legal battles, with Democrats in Congress asking former President Donald Trump’s administration to loosen rules and maintain the spirit of the program. Education Secretary Betsy DeVos at the time responded that she had followed the rule approved in Congress to the letter.

Declaring the program “broken,” the Biden administration issued a temporary waiver in 2021 that allowed borrowers to approve earlier deferments or forbearances, among other changes. A year later, the Department of Education updated the rules to extend eligibility permanently.

Since then, a wave of debtors approaching their decade of public service have had their loan waiver petitions accepted. On Thursday, another 60,000 reached that mark, bringing the total number of users to over one million. When Biden came to the White House, just 7,000 people had received aid in the previous four years.

In total, the program has eliminated 74 billion in public sector debt.

“I want to send the message to college students across America that public service is not only a noble calling, but also a reliable path to becoming debt-free within a decade,” said Education Secretary Miguel Cardona. In a statement.

After its plans for student loan relief faced legal challenges, the Biden administration is increasingly focused on canceling a record number of loans through existing programs.

In total, the government says it has canceled 175 billion loans of 5 million beneficiaries. The Public Service Loan Forgiveness Program accounts for much of that number, while others were able to pay off their loans through income-based repayment programs and a 1994 law that provided assistance to students who had been cheated by their schools.

Biden included widespread debt forgiveness in his campaign, but last year, the Supreme Court blocked his plan to strip up to $20,000 from 40 million Americans. The president ordered the Department of Education to come up with the same proposal with a different legal justification, but after several Republican-majority states appealed, a judge in Missouri temporarily blocked the plan.