The prospect of having their college loans written off in the future is a major incentive for millions of Americans to enter public service. After ten years of service, they can petition for full forgiveness through the federal government’s Public Service Loan Forgiveness program. The administration has now wiped away billions more worth of debt from people.
A total of $9 billion in forgiven debts for 125,000 Americans was revealed by President Joe Biden on October 4. The administration estimates that 53,000 borrowers will benefit from the Public Service Loan Forgiveness programs, which will cost $5.2 billion. Another $1.2 billion was set aside for 22,000 debtors whose disabilities were considered permanent or total and whose information was successfully matched with Social Security Administration records.
Almost $2.8 billion of the forgiveness was described as “new debt relief” through the administration’s “fixes to income-driven repayment.” It was for 51,000 borrowers who had been making payments for 20 years or more but never received the relief the president claims they were entitled to receive.
Reducing the burden of student debt is a top priority for President Biden’s administration. The Supreme Court ruled against his attempt to have millions of people whose incomes fell within certain parameters have their debts written off. The administration has instead prioritized alterations to the income-driven repayment program, although even these “fixes” are currently being reviewed by the courts.
After a three-year delay in repayment due to the national health emergency, the announcement came only days before Americans were to resume making payments on their student loan debt. In an effort to help Americans weather the financial storm during the crisis, former President Donald Trump temporarily halted the loan repayments. When President Joe Biden joined office, he repeatedly extended that suspension.
On Wednesday, Biden gave a speech in which he promised to keep looking for methods to reduce Americans’ debt.
