President Joe Biden announced on Thursday that around 78,000 public service workers will have almost $6 billion in student debt forgiven.
The Biden administration is canceling the debt for workers, including teachers, nurses, and firefighters, through the Public Service Loan Forgiveness program. It cancels a borrower's remaining student debt after 10 years of public interest work, or 120 monthly payments.
"These public service workers have dedicated their careers to serving their communities, but because of past administrative failures, never got the relief they were entitled to under the law," the president said in a statement.
"Because of the fixes my administration has made, we have now canceled student debt for over 870,000 public service workers – compared to only about 7,000 public service borrowers ever receiving forgiveness prior to my administration."
Nearly four million Americans have had their student debt canceled due to various actions taken during his administration, he added.
Biden said the latest round of forgiveness comes on top of other actions his administration has taken to help student loan borrowers, including fixing income-driven repayment plans so borrowers get the relief they have earned after years of repayment and creating the "most generous" repayment plan in history—the Saving on a Valuable Education (SAVE) plan.
Last month, Biden announced that forgiveness under the SAVE plan would be taking effect almost six months ahead of schedule.
On Thursday, he also said his administration is continuing to pursue an alternative path to widespread debt cancellation after his plan to cancel more than $400 billion in student debt was struck down by the Supreme Court in June last year. That plan would have canceled up to $20,000 in federal student loans for those with annual incomes below $125,000 or couples with incomes below $250,000.
Student loans — Who's affected?:
In the U.S., 30% of adults—representing over 40% of those who went to college—borrowed money to fund their own education. Of those who borrowed to pay for college, 21% still owe money on outstanding loans and 21% have fully repaid their debts, according to Federal Reserve data for 2022.
Student loans — How much people owe:
Most people who still have outstanding student loans owe less than $25,000, while just over one quarter owe less than $10,000.
Student loans — How it affects different groups:
Black people are likely to have higher levels of outstanding student loan debt than other groups. Overall, 47% of people who borrowed money for college have at least $25,000 of outstanding student loan debt. Among Black adults, 57% have at least $25,000 of student debt, compared to 52% of Asian adults, 45% of white adults, and 39% of Hispanic adults.
The Biden administration is now pursuing another plan under a different legal authority to the one the Supreme Court rejected. The plan is not finalized, but the Education Department in late October released a draft of a proposal that hopes to provide relief to certain groups of borrowers.
"From day one of my administration, I promised to fix broken student loan programs and make sure higher education is a ticket to the middle class, not a barrier to opportunity," Biden said.
"I won't back down from using every tool at my disposal to deliver student debt relief to more Americans, and build an economy from the middle out and bottom up."
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Khaleda Rahman is Newsweek's Senior News Reporter based in London, UK. Her focus is reporting on abortion rights, race, education, ... Read more
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