Biden administration approves student loan forgiveness for another 45,000 public sector workers – KION546

By Katie Lobosco, CNN

The Biden administration approved federal student loan debt forgiveness for another 45,000 public sector workers in recent monthsaccording to the Ministry of Education, in addition to the 100,000 borrowers previously deemed eligible.

These workers are eligible for student loan forgiveness due to changes made by the Ministry of Education to the civil service loan cancellation program in October.

Since then, the administration has approved the cancellation of about $8.1 billion in federal student loan debt for nearly 145,000 borrowers under the new waiver. Some of these borrowers have been approved for loan forgiveness but have not yet received relief.

The number of borrowers whose debt relief has been approved so far is only a fraction of the 550,000 borrowers the Department of Education had originally estimated that he would qualify for student loan forgiveness under the program’s temporary expansion.

The Public Service Loan Forgiveness Program promises to erase remaining federal student loan debt after a government or eligible nonprofit worker has made 10 years of monthly payments. The program was created about 15 years ago, but a very small percentage of borrowers who applied had received forgiveness before 2021.

Many people have criticized the program as being difficult to navigate and some said they found out they weren’t eligible for forgiveness only after making what they thought was a decade’s worth of qualifying payments. Only borrowers with specific types of federal loans and enrolled in certain repayment programs were eligible.

How the PSLF override works

Last year, the Biden administration temporarily expanded eligibility through Oct. 31, 2022, so the program now includes borrowers who had loans that weren’t originally eligible.

Because of the temporary waiver, it no longer matters what borrowers’ federal student loan type or repayment plans they are enrolled in. All payments will be eligible for the Civil Service Loan Forgiveness Program if the borrower was working full-time for an eligible employer. .

Previously, eligibility also depended on having a federal direct loan and enrolling in an income-based repayment plan, which sets payments based on income and family size. Those with federal home education loans, which were provided by private lenders but backed by the government, were not eligible.

Many borrowers do not have to do anything to have the Department of Education review and update their qualifying payment count.

But those who currently have older federal family education loans will need to consolidate them into direct loans by Oct. 31. Payments made before consolidation will now count towards receiving relief.

Those who already have direct loans but have not submitted proof of employment forms for previous repayment periods must also do so by October 31.

Biden eyes broader student loan forgiveness

President Joe Biden said in April that he was plans to use its executive power to cancel student loan debt more generally. He has faced pressure from other Democrats for months to write off $50,000 per borrower.

Biden said if he took action to cancel federal student loan debt globally, it would be for less than $50,000 per borrower.

During the campaign trail, Biden said he would support $10,000 in pardons. White House officials said the president is also considering setting an income threshold so that high-income borrowers are excluded from debt relief.

The decision should come before August 31, when the pandemic-related break on federal student loan payments is about to end.

While large-scale student debt cancellation could bring financial relief to millions of Americans, the implications of such an important policy decision are complicated. The action alone would do nothing to lower the cost of college education for future borrowers or help those who have already paid for their degrees.

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