The approval of student debt cancellation for approximately 74,000 borrowers, primarily employed in public service, was announced by the Biden administration.
As per the statement from the White House, 44,000 professionals in the public sector, including educators and healthcare providers, will have their outstanding debt forgiven after a decade of service. An extra 30,000 individuals who have been repaying their debt for 20 years will also have their debt waived. The specific timeline for when these borrowers will no longer need to make payments is currently uncertain.
The Biden administration announced that in addition to previous efforts, 3.7 million individuals in the United States have had their federal student loan debt forgiven since President Joe Biden’s inauguration.
According to a statement from Biden, his Administration has the ability to provide assistance to borrowers, including millions who were previously unable to receive relief due to flaws in the student loan programs. These reforms were necessary to ensure that borrowers receive the relief they are legally entitled to.
Debt cancellation is an option for public service employees who have completed 120 qualifying monthly payments while employed full-time by an eligible employer under an approved repayment plan.
Individuals enrolled in income-driven repayment programs have been qualified for loan forgiveness after a period of 20 years.
The government announced revisions to their method of calculating the duration of borrower repayments in July 2023. As a result, approximately 901,000 borrowers who had taken out student loans at least two decades ago became qualified for loan forgiveness.
Individuals who deferred their payments due to economic or military hardship after 2013 are now eligible to use that time to have their loans forgiven. Additionally, those who were in forbearance for 12 consecutive months or a total of 36 months can also use that time to pay off their loans.
The declaration was made one week after the White House announced that those who are enrolled in the Saving on a Valuable Education (SAVE) Plan and have been making payments for at least 10 years, and initially borrowed up to $12,000, will now be qualified for loan forgiveness. Those who are eligible will have their loans automatically waived.