Biden administration cancels another $1.2 billion in student loans for public service employees

The Biden administration is canceling an additional $1.2 billion in student loans for borrowers who work in public service through changes to an existing forgiveness program.

The relief for about 35,000 borrowers was announced Thursday by the Department of Education and made through changes to the Public Service Loan Forgiveness program, which benefits workers such as teachers, nurses and firefighters. Those who qualify for forgiveness have their remaining loan balance wiped away after making 120 qualifying monthly payments.

“These 35,000 borrowers approved for forgiveness today are public service employees – teachers, nurses, police officers and first responders who have dedicated their lives to strengthening their communities, and because of the corrections we made to public service loan forgiveness, they now have more room to breathe to support themselves and their families,” Biden said in a statement.

The public service forgiveness program was created by Congress in 2007, but many borrowers were unable to get the forgiveness they had worked for due to strict rules and errors made by loan servicers in calculating their payments. Under the Biden administration, some rules were adjusted and retroactively granted credit to many borrowers for their 10 years of payments.

The announcement comes amid legal back-and-forth over the administration’s bigger plans for student loan forgiveness, which faces challenges from Republican-led states. In June, judges in two federal cases opposing the new SAVE plan, which included reduced monthly payments and a faster path to forgiveness, issued injunctions prevent the plan from coming into force.

But shortly thereafter, the 10th Circuit Court of Appeals issued a to stay in one of the actions, allowing the Department of Education to move forward with reducing monthly payments.

Biden’s original plan for one-time debt cancellation was knocked down by the Supreme Court, which said the measure exceeded the president’s authority.

With this latest round of loan cancellation, the administration has now forgiven $168.5 billion in student debt for 4.76 million borrowers, including $69.2 billion for 946 billion borrowers through the forgiveness program of public service.

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