Up to 30,000 student loan borrowers will have a cumulative $2 billion in debt forgiven by the Biden Education Department, after a series of major changes to the troubled Public Service Loan Forgiveness (PSLF) program were announced.
In a Thursday tweet, Education Secretary Miguel Cardona announced that "30K+ borrowers will get an estimated $3B forgiven." Of that, "Roughly 10K have already had $715M discharged" with another 20,000 to follow.
Here are the details:— Secretary Miguel Cardona (@SecCardona) November 11, 2021
▪️ 30K+ borrowers will get an estimated $2B forgiven.
▪️ Roughly 10K have already had $715M discharged.
▪️ 20K will receive emails in the coming weeks.
Check your inboxes!
"This is fantastic news for those who will have their debts cancelled and demonstrates how the Biden administration has the power to make life better for all people with student debt," Mike Pierce, executive director at the Student Borrower Protection Center, told Yahoo Finance. "With payments currently set to restart in less than 90 days, there is much more work to be done for our public servants and all Americans with student loan debt."
Created by Congress in 2007, the PSLF program supplies taxpayer dollars for government and non-profit employees - including teachers, nurses, service members, first responders and other public service workers with federally-backed student loans to apply for forgiveness after providing proof of 120 monthly payments under a qualified repayment plan.
ED's policy change in October was previously expected to result in 22,000 student loan borrowers with consolidated loans — which were previously ineligible to be counted towards loan forgiveness — becoming "immediately eligible" for $1.74 billion in forgiveness. -Yahoo Finance
"The temporary waivers announced by the Department of Education have been an actual life changing event for many of the borrowers we work with," Betsy Mayotte, president of The Institute of Student Loan Advisors, told Yahoo Finance, adding that she's received dozens of notes from borrowers who "woke up this week to find that their balance is finally zero."
According to the report, citing the National Education Association, 45% of educators took out an average of $55,800 in student loans to attend college. Of them, 14% with an unpaid loan balance are carrying $105,000 or more.
When it comes to service members, the NEA found last year that while 200,000 service members hold a cumulative $3 billion in student loan debt, just 17,534 had submitted the proper paperwork to seek forgiveness - while around 40% of those applicants were actually on track for debt relief.
"As the burden of student loan debt has impacted ever larger swathes of American society, the U.S. military has seen more service members come onto active duty with student loans," said former former director of military and consumer protection at Veterans Education Success, Mike Saunders. "This means that PSLF has become a huge factor when it comes to getting the all-volunteer force to reenlist past their initial service obligation."