Biden expands loan forgiveness for public sector workers

Identification of 100,000 eligible borrowers cast as first step to fulfill long-promised relief for teachers and others in public and non-profit jobs

March 10, 2022
The White House illustrating news article about student debt forgiveness by the Biden administration

The Biden administration is significantly expanding a programme neglected by its predecessor that provides student loan forgiveness to teachers and other public sector and non-profit workers.

The administration announced it has identified 100,000 borrowers with more than $6 billion (£5 billion) in debt as eligible for full forgiveness, with a goal of raising that number to 550,000.

Under a federal law established in 2007, student loan borrowers are eligible for debt cancellation after working 10 years full time in government or not-for-profit positions.

But just as large numbers of borrowers started to become eligible for the Public Service Loan Forgiveness programme, the Trump administration took steps that hindered its use. Governmental investigations showed the administration created and exacerbated confusing rules for its use and denied 99 per cent of applications.

As a government estimate of the potential number of eligible borrowers neared 1 million, the outgoing administration also proposed repealing the law altogether.

Mr Biden headed in the other direction, promising during the 2020 presidential campaign that he would cancel $10,000 in student debt for all US borrowers. In office, he has hesitated on across-the-board forgiveness, for reasons that experts see encompassing political, fiscal and legal concerns – including a split among progressive leaders over whether broad student loan forgiveness advantages the wealthy more than it aids the most needy.

The Biden administration instead has announced a series of actions to forgive student loans in specific circumstances, so far sparing nearly 700,000 borrowers more than $15 billion. Those cases mostly involve students who are permanently disabled or attended a for-profit institution considered to have defrauded them through false promises of future job eligibility.

The Trump administration also resisted that option, to the point where a federal judge in 2019 fined its education secretary, Betsy DeVos, and threatened her with contempt, for persisting with debt collection processes against such defrauded students.

The auditing agency of Congress, the US Government Accountability Office, issued an investigative report in 2018 that acknowledged the complexity of the federal law that provides student loan forgiveness for people working in the government or at non-profit employers. But it also cited a chronic failure of the Trump administration to fix them.

The Biden administration announcement of 100,000 eligible borrowers comes from a pool of more than 550,000 borrowers who already have consolidated their debts from their years in college into a single amount, easing their pathways to forgiveness. The 100,000 eligible borrowers include some people who already have received their debt relief, department officials said.

Register to continue

Why register?

  • Registration is free and only takes a moment
  • Once registered, you can read 3 articles a month
  • Sign up for our newsletter
Please Login or Register to read this article.

Related articles