The Education Department has announced that President Joe Biden has approved another $300 million in student loan forgiveness, marking record approval rates for the Public Service Loan Forgiveness (PSLF) program. This program allows borrowers who work in public service to have their federal student loans wiped out after making 120 qualifying monthly payments over 10 years. The Biden administration has implemented several initiatives to improve access to the PSLF program, resulting in a significant increase in the number of borrowers receiving loan forgiveness.
The PSLF approvals announced last week were part of a larger batch of student loan forgiveness approved by the Biden administration under several programs. The department has approved at least $3 billion in forgiveness through the new SAVE plan, an income-driven repayment plan introduced last fall that can shorten borrowers’ forgiveness timelines to as little as 10 years for those with small loan amounts. Additionally, over 65,700 borrowers were approved for debt relief under the IDR Account Adjustment, a temporary initiative that relaxes rules for income-driven repayment plans and allows past periods of repayment, deferment, and forbearance to potentially count towards forgiveness.
The Biden administration has made significant changes to the PSLF program, which had previously suffered from low approval rates and borrower confusion. Since Biden took office, the program has seen a one percent approval rate increase to almost 876,000 borrowers receiving $62.8 billion in forgiveness. The administration has implemented several reforms, including the Limited PSLF Waiver, IDR Account Adjustment, regulatory reforms, and a new online platform for submitting employment certifications, making it easier for borrowers to qualify for loan forgiveness under PSLF.
In addition to the PSLF approvals, the Education Department also approved over 200,000 borrowers for debt relief under the SAVE plan and 65,700 borrowers under the IDR Account Adjustment initiative. These temporary programs aim to provide relief to borrowers facing financial hardship and those who may qualify under the relaxed rules for income-driven repayment plans. Borrowers may need to take action before the end of April in order to qualify for these initiatives, which are set to wind down this summer.
Following the recent announcements of student loan forgiveness approvals, President Biden is expected to unveil a new mass debt cancellation plan as a replacement for his previous plan that was rejected by the Supreme Court. This new program will target relief to five groups of borrowers, including those facing hardship. While the program must go through additional administrative steps before it is officially launched, borrowers could start applying as soon as this fall. However, there is a possibility that the program could face legal challenges that may impact its implementation.
