Education Department Approves $8.1 Billion In Student Loan Forgiveness Under Expiring Program — Will Biden Extend It?
The Biden administration on Friday announced that it has approved over $8 billion in student loan forgiveness for 145,000 borrowers under a temporary expansion of the Public Service Loan Forgiveness (PSLF) program. But the initiative is set to end in just a few months. And advocates are calling on Biden to extend it.
Here are the details.
Biden Administration Approves Billions in Student Loan Forgiveness Under Expanded PSLF Program
In October, the Biden administration announced a broad (but temporary) expansion of the Public Service Loan Forgiveness (PSLF) program. Borrowers who commit to working for at least 10 years for certain nonprofit or government organizations can get their federal student loans forgiven through PSLF. But historically, the PSLF program has been plagued by low approval rates, complicated eligibility rules, and poor oversight.
The expansion — which the Biden administration has dubbed the Limited PSLF Waiver program — temporary relaxes key PSLF eligibility rules, effectively expanding the program. For a limited time, past loan periods that would otherwise have been rejected (such as periods where payments were made under an ineligible repayment plan or not at all, or payments were made on non-qualifying kinds of federal student loans) can be counted towards the time period required for borrowers to get their student loans forgiven under the program.
Some borrowers may have to take certain steps, like consolidating their loans through the Direct Consolidation program and submitting forms certifying their public service employment, to get the credit.
The Biden administration’s latest figure of $8.1 billion in student loan forgiveness under the Limited PSLF Waiver is roughly $1 billion more than its most recent figures released earlier in the spring, indicating the Education Department is continuing to approve loan forgiveness for thousands of borrowers on an ongoing, rolling basis. The Department emphasized through a spokesperson that the $8.1 billion figure includes borrowers who have already received relief, as well as borrowers who will receive the relief soon.
Student Loan Forgiveness Under Limited PSLF Waiver Ends in October 2022
But the Limited PSLF Waiver program is set to end on October 31, 2022. After that, absent any further changes, the program would revert back to the original PSLF rules, which were far more restrictive. The Education Department is working on overhauling the PSLF regulations to enact more permanent changes, but any final regulations would not be effective until later in 2023.
Earlier this month, student loan borrower advocacy organizations called on the Biden administration to extend the Limited PSLF Waiver program beyond the October 31 deadline. Citing data suggesting the program may be underutilized, the Student Loan Borrower Protection Center (SPBC) urged the Education Department to push out the program’s end date.
“We’ve only scratched the surface” of relief under PSLF, said SBPC executive director Mike Pierce in a statement earlier this month. “Secretary Cardona needs to recognize that you can’t have too much of a good thing — extend the waiver now and deliver debt relief for millions in the future.”
A coalition of labor unions advocating for their members expressed similar concerns. “The Limited PSLF Waiver marks a once-in-a-generation opportunity for our educators to access student debt cancellation,” said Becky Pringle, President of the National Education Association (NEA), one of the nation’s largest teacher’s unions. “However, its rollout was fast, and by the time public servants figured out the new temporary rules, the program was halfway done… Educators and public service workers need more time to get forgiveness they deserve.”
Biden Considers Broader Student Loan Forgiveness
The Biden administration has not publicly indicated whether it plans on extending the Limited PSLF Waiver beyond October. But top White House officials, and President Biden himself, have suggested that a broader student loan forgiveness initiative could be in the works. Biden told reporters earlier this week that a decision on mass student loan forgiveness would be made in the coming days or weeks.
Any wide-scale student loan forgiveness would likely have a fairly low cap, as Biden has rejected calls to cancel $50,000 or more in student loan debt. And reports indicate that administration officials may impose income restrictions, as well.
Further Student Loan Reading
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Biden Reportedly Nears Decision On Widespread Student Loan Cancellation — Here’s Where Things Stand
Biden’s New Student Loan Forgiveness Changes May Wind Up Costing Some Borrowers
Want Student Loan Forgiveness? To Qualify, Borrowers May Need To Do This First