As time is running out in his administration, President Joe Biden is forgiving more student loans -- $4.28 billion in student debt for 54,900 borrowers in the Public Service Loan Forgiveness program, which President-elect Trump proposed to eliminate during his first term.
This latest student debt cancellation is for government and nonprofit workers after 10 years of qualifying payments, and caps off a tumultuous few years for student loan borrowers hoping for broad debt relief. This cancellation brings “the total number of individuals who have been approved for student debt relief under my Administration to nearly 5 million people through various actions,” Pres. Biden said in a White House statement. That includes $78 billion for roughly 1 million borrowers through PSLF.
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“Over the last four years, we have made significant progress for students and borrowers – including securing the largest increase to the maximum Pell Grant award in over a decade; holding institutions accountable for taking advantage of students; and fixing broken student loan programs such as Public Service Loan Forgiveness,” said Pres. Biden.
In October, Pres. Biden unveiled a new grand-scale plan to forgive student loans with a proposed new rule that would authorize forgiveness for eight million borrowers facing "hardship," despite his two previous unsuccessful attempts to cancel student loans on a grand scale.
Related: Biden’s new student loan forgiveness plan: A 3rd attempt at debt cancellation for 8M
Under that plan, the Education Department can discharge debt if it calculates a borrower has an 80% likelihood of defaulting on payments within two years based on 17 factors, including income, debt balances and assets.
Biden's first attempt at massive student loan forgiveness was axed by the Supreme Court on June 30, 2023. Hours later, the president announced the $475 billion Saving on a Valuable Education (SAVE) plan, which has been tied in federal courts for months and is now on hold, after a federal judge in Missouri blocked the plan earlier this month, just one day after a judge in Georgia gave approval to go forward. The states argued that the SAVE plan, which the administration had wanted to start implementing this fall ahead of the presidential election, is illegal.
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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.
