The Biden administration is making changes to an existing debt forgiveness program to cancel another $1.2 billion in student loans for borrowers who work in the public sector.
The relief for about 35,000 borrowers was announced by the Education Department on Thursday and came through changes to the Public Service Debt Forgiveness program, which benefits workers such as teachers, nurses and firefighters. Those who qualify for the debt forgiveness will have the remaining loan balance forgiven after paying 120 qualifying monthly payments.
“The 35,000 borrowers approved for debt relief today are public service workers – teachers, nurses, police officers and first responders who have dedicated their lives to strengthening their communities. And because of the fixes we made to public service debt relief, they will now have more flexibility to support themselves and their families,” Biden said in a statement.
The Public Service Debt Forgiveness program was created by Congress in 2007, but many borrowers were unable to receive the debt relief they longed for due to strict rules and errors by loan servicers in processing their payments. Under the Biden administration, some rules were adjusted and many borrowers were given a retroactive credit toward their 10-year payments.
The announcement comes amid a legal back-and-forth over the administration’s larger student loan forgiveness plans, which are being challenged in Republican-led states. In June, judges in two federal cases challenging the modern SAVE plan, which offered lower monthly payments and a faster path to forgiveness, issued preliminary injunctions blocking the plan from going ahead.
But shortly thereafter, the 10th Circuit Court of Appeals granted a stay in one of the cases and allowed the Department of Education to proceed with reducing monthly payments.
Biden’s original plan for a one-time debt relief was overturned by the Supreme Court, which argued that the move exceeded the president’s authority.
With this latest round of loan forgiveness, the government has now forgiven $168.5 billion in student debt for 4.76 million borrowers, including $69.2 billion for 946,000 million borrowers under the Public Service Debt Forgiveness Program.
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