While the Supreme Court makes a decision whether to block President Joe Biden's massive new Saving on a Valuable Education (SAVE) student loan repayment program, he announced today another round of another student loan forgiveness – roughly $1.2 billion in additional student loan relief for 35,000 borrowers across the country who work in public service, announced the Department of Education.
Today's announcement brings the total loan forgiveness approved by administration to $168.5 billion for 4.76 million Americans, which includes $69.2 billion for 946,000 million borrowers through the Public Service Loan Forgiveness (PSLF) program. The Education Department said that the relief was made possible via its work to overhaul the PSLF program, which allows public employees to apply for forgiveness after making 10 years' worth of payments.
"These 35,000 borrowers approved for forgiveness today are public service workers – teachers, nurses, law enforcement officials, and first responders who have dedicated their lives to strengthening their communities," announced Pres. Biden.
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This loan cancellation "marks another win for this administration's relentless and unapologetic work to fix a broken student loan system," said U.S. Secretary of Education Miguel Cardona.
However, today's announcement comes as Pres. Biden is fighting two legal challenges. Two federal judges, in Missouri and Kansas, on June 24, halted parts of President Joe Biden's new SAVE student loan repayment plan. Then last week, three GOP-states – South Carolina, Texas and Alaska –asked the Supreme Court to block President Biden's new SAVE income-driven student loan repayment program, which was set to begin in July.
In the emergency filing, the states are asking the Supreme Court to reverse the recent ruling by the Denver-based appeals court that allowed a key part of the plan designed to lower monthly payments to resume.
Under the SAVE plan, borrowers who originally took out $12,000 or less in loans and have been in repayment for 10 years are eligible to have their remaining student loan debt canceled. More than 8 million borrowers are enrolled in the SAVE plan, and the Education Department was ready to cancel $5.5 billion of debt for 414,000 borrowers.
In addition to the relief under PSLF, the administration has also approved:
- $51 billion for more than 1 million borrowers through administrative adjustments to income-driven repayment payment counts. These adjustments have brought borrowers closer to forgiveness and addressed longstanding concerns with the misuse of forbearance by loan servicers.
- $28.7 billion for more than 1.6 million borrowers who were cheated by their schools, saw their institutions precipitously close, or are covered by related court settlements.
- $14.1 billion for more than 548,000 borrowers with a total and permanent disability.
- $5.5 billion for 414,000 borrowers through the SAVE Plan.
In the recent Supreme Court filing for the SAVE program, the states argue the administration's current effort is "every bit as unlawful" as Biden's first attempt to wipe out student loan debt, a move that was struck down by the Supreme Court in 2023.
The Supreme Court "must unfortunately step in again," the states' attorneys wrote in their filing.South Carolina Attorney General Alan Wilson expects the Supreme Court will likely respond to SAVE petition in the coming days.
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Lynn Cavanaugh
Lynn Varacalli Cavanaugh is Senior Editor, Retirement at BenefitsPRO. Prior, she was editor-in-chief of the What's New in Benefits & Compensation newsletter. She has worked for major firms in the employee benefits space, Vanguard and Willis Towers Watson, as well as top media companies, including Condé Nast and American Media.
