$42 billion in loans to teachers, nurses, service members forgiven under Biden

The Department of Education on Monday announced that $42 billion in student loan forgiveness has been approved for over 615,000 borrowers since October 2021 following changes to the Public Service Loan Forgiveness Program under President Joe Biden.

“To date, the Biden-Harris team has kept that promise for more than 615,000 teachers, nurses, social workers, servicemembers, and other public servants by approving a combined $42 billion in student loan debt forgiveness,” Secretary of Education Miguel Cardona said in a statement.

The department said the announcement was made to coincide with Public Service Recognition Week (May 7-13), which since 1985 has honored the work of those employed by federal, state, county, tribal and local governments.

The Public Service Loan Forgiveness Program makes student loan forgiveness available for people who are employed by the government or nonprofit organizations and who have made 120 qualifying monthly payments on their debt.

The program began after Congress passed legislation in 2007 but has been regularly plagued by problems. The Department of Education reported in 2018 that 99% of applicants seeking loan forgiveness had been denied. That same year a report issued by the Government Accountability Office noted that inadequate guidance and instructions offered to applicants were a major factor in failures to approve applications.

In its release on Monday, the Education Department said that under the existing system, only about 7,000 borrowers had received approval by the end of former President Donald Trump’s term in the White House.

In October 2021, the Biden administration announced a one-year waiver relaxing the qualification requirements for loan forgiveness. As part of that process, many loans that had previously been disqualified would now count toward forgiveness. The changes also increased the types of loan payments that could be considered in meeting the 120-payment standard.

The waiver period ended Oct. 31, 2022. The department said that it had made changes to an online “help tool” to assist applicants apply for forgiveness under the old system, allowing the entire process to be done on the internet for the first time without printing out forms and requiring hard copy signatures.

Republicans and conservatives oppose the Public Service Loan Forgiveness Program and related reforms.

In his final proposed budget in 2021, Trump proposed completely ending the program despite estimates from the Consumer Financial Protection Bureau that up to a quarter of American workers would be eligible for loan forgiveness.

The conservative Pacific Legal Foundation on Sept. 27, 2022, filed a lawsuit on behalf of an employee alleging that that employee would be harmed by the expanded eligibility guidelines put in place by the administration because he would be forced to pay higher state taxes if his loan was forgiven. The case, Garrison v. U.S. Department of Education, was dismissed in federal court and an appeal was rejected by the Supreme Court in November 2022.

Biden last year proposed a separate student loan forgiveness program that together with the Public Service Loan Forgiveness program would cancel as much as $10,000 each in debt for an estimated 20 million people. That effort has been opposed by Republican state attorneys general, who are backing a legal challenge that is under consideration by the Supreme Court.

Published with permission of The American Independent Foundation.