Student loans: Biden administration discharges additional $4.8 billion in student debt
The Biden administration discharged another $4.8 billion in student loan debt for more than 80,000 borrowers, the Education Department announced Wednesday.
That brings the total amount discharged since President Joe Biden took office to $132 billion for more than 3.6 million borrowers.
The latest discharges include $2.6 billion for 34,400 borrowers using the public service loan forgiveness (PSLF) program and waiver and $2.2 billion for 46,000 borrowers under the one-time payment adjustment for income-driven repayment plans.
“Before President Biden took office, it was virtually impossible for eligible borrowers to access the student debt relief they rightfully earned,” Miguel Cardona, Secretary of Education, said in a press statement. “The data released today once again make clear that the Biden-Harris Administration’s relentless efforts to fix the broken student loan system are paying off in a big way…This level of debt relief is unparalleled and we have no intention of slowing down.”
PSLF loan discharge for military and certain professions in public service
Around 750,000 borrowers have received $53.5 billion in relief from the PSLF program, which includes the limited PSLF waiver that ended last October. Only about 7,000 borrowers had received forgiveness through these programs when the president took office.
Teachers, nurses, doctors, lawyers, and other professionals who work in public service jobs with federal, state, local, or certain non-profit organizations are eligible to have their remaining loan balances discharged after 10 years of payments through the PSLF program.
PSLF is also available for military service members who don’t qualify for other military loan forgiveness programs.
The number of PSLF borrowers who got a discharge increased because of settlement of a lawsuit brought by the American Federation of Teachers (AFT) that offered a PSLF waiver allowing those denied loan forgiveness to reapply by last October.
The AFT sued ED after more than 98% of borrowers who applied for the PSLF program were denied loan forgiveness under US Education Secretary Betsy DeVos during the Trump Administration.
One-time payment adjustment
The one-time payment adjustment for income-driven repayment plans was announced last year and counts certain months that were previously ineligible for student loan forgiveness.
The adjustment helps to reverse some of the damage caused by loan servicers that did not properly track deferments or steered borrowers to forbearance instead of income-driven repayment plans that would have counted toward years of payment.
Borrowers that were in repayment for 20-25 years started to see their debt discharged and received notices in August. These discharges are still being processed. All other federal loan borrowers will see the one-time adjustment applied in 2024.
In addition to relief given to PSLF borrowers and those benefiting from the one-time adjustment, almost 513,000 borrowers with a total and permanent disability received $11.7 billion in debt discharges and over 1.3 million borrowers who were defrauded by their schools received $22.5 billion in discharges under the borrower defense discharge, according to the Education Department.
Ronda is a personal finance senior reporter for Yahoo Finance and attorney with experience in law, insurance, education, and government. Follow her on Twitter @writesronda
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