WASHINGTON (AP) — A student loan cancellation program for federal workers has provided relief to more than 1 million Americans — up from just 7,000 approved before it was updated by the Biden administration two years ago.
President Joe Biden announced the milestone Thursday, saying his administration had fulfilled a promise to America’s teachers, firefighters, nurses and other public servants. He celebrated this even as his broader student loan plans continued to be halted by courts after legal challenges from Republican-led states.
“The administration has failed to meet its obligations for too long,” Biden said in a statement. “We vowed to fix this, and thanks to our administration’s actions, over one million public workers have now received the relief they are legally entitled to.”
The Public Service Loan Forgiveness program, launched in 2007, promises college graduates that the remainder of their federal student loans will be canceled to zero after 10 years of working in government or nonprofit organizations. But as of 2017, the huge majority of applicants were rejected due to complicated and little-known admissions requirements.
A 2018 Government Accountability Office report found that 99% of applicants were rejected, often because they were not on the correct loan repayment plan or because their payments were temporarily suspended through deferment or forbearance – periods of time that did not count toward loan repayment 10 years of public work.
The GAO accused the Department of Education of failing to clearly spell out the rules.
The program has been the subject of legal and political battles, with Democrats in Congress calling on the Trump administration to relax the rules and uphold the spirit of the program. Betsy DeVos, then education secretary, responded that she was faithfully following the rules passed by Congress.
Declaring that the program was “broken,” the Biden administration in 2021 offered a momentary waiver that, among other things, allowed borrowers to obtain loans for previous deferment or forbearance periods. A year later, the Education Department updated the rules to expand eligibility more permanently.
Since then, waves of borrowers have been cleared for cancellation once they hit the 10-year target line. On Thursday, another 60,000 reached the mark, taking the total past one million. When Biden took office, only 7,000 borrowers had received relief in the previous four years.
In total, the program canceled $74 billion in loans for public employees.
“I want to convey the message to college students across America that a career in public service is not only a noble calling, but a reliable path to becoming debt-free within a decade,” Education Secretary Miguel Cardona said in a statement.
After Biden’s own student loan plans faced legal challenges, his administration increasingly turned its attention to the record amounts of loan cancellations awarded under existing programs.
In total, the government says it has now forgiven around 5 million borrowers $175 billion. Most of that relief has come from public service loan forgiveness, while others have had their loans canceled under income-driven payment plans and through a 1994 rule that provided relief to students defrauded by their schools.
Biden promised comprehensive student loan cancellation during the campaign, but last year the Supreme Court blocked his proposal to cancel up to $20,000 for 40 million Americans. Biden directed his Education Department to try again on a different legal justification, but a judge in Missouri temporarily halted the plan after several Republican states challenged it.
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