Another 125,000 student loan borrowers will have $9 billion in student loan debt erased, the Biden administration said Wednesday.
Those borrowers were already eligible for cancellation through various programs: Public Service Loan Forgiveness for people working as teachers and health care workers, for instance; income-driven repayment plans that link payments to wages and forgive balances after 20 or 25 years of payments; or discharges for those with disabilities.
They got the ‘golden emails:’Student loan debt forgiveness becomes a reality for more than 804,000 who paid for decades
Who are the latest to have their student loans canceled?
The White House said the $9 billion in debt forgiveness breaks down like this:
- $5.2 billion for 53,000 borrowers who worked for at least a decade in eligible public service fields such as teaching or the military;
- Nearly $2.8 billion for nearly 51,000 borrowers through adjustments to income-driven repayment plans. These individuals had been in repayment for two decades or more and finally reached the threshold of payments for forgiveness; and
- $1.2 billion for nearly 22,000 borrowers who have permanent disabilities and were identified through a social security data match.
The administration’s actions Wednesday – which Education Secretary Miguel Cardona described as “efforts to fix the broken student loan system” – come as student loan payments return for millions of borrowers after a more than three-year hiatus during the pandemic.
The timing: Some of these borrowers have just now, coincidentally, met all the criteria to have their loans forgiven. Others, because of bureaucratic mix-ups or other obstacles, however, never got the relief they were entitled to, until now.
The forgiveness comes after a number of similar announcements since June, when the Supreme Court struck down President Joe Biden’s original plan of providing up to $20,000 in loan forgiveness for most borrowers. Although the president was thwarted in his attempt at far-reaching relief, his administration has managed to chisel away at student loan debt on a smaller scale.
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Who else has had student debt canceled?
The White House boasts having erased $127 billion in student debt, covering some 3.6 million Americans.
One of the biggest tranches of that forgiveness came for about 804,000 borrowers in recent weeks. This group had been paying down their loans for at least two decades and had chosen plans that aligned the size of their payments with their income. Loan forgiveness at the end of all of that never materialized.
Among the 125,000 borrowers whom the White House said Wednesday will have their debt erased are another group in the same situation: They signed up for income-driven repayment plans, paid on their loans for more than 20 years and are ready to have their balances erased.
Other groups who have been promised loan forgiveness include borrowers who were misled or defrauded by their colleges or attended schools that abruptly closed.
Overall, more than 40 million Americans have student loan debt worth about $1.7 trillion.
Is there more student debt relief to come?
The announcement comes ahead of the kickoff of Biden’s second attempt at mass loan forgiveness. Next week, a committee made up of colleges, borrowers, state attorneys general, and student loan servicers meets for the first time to discuss another possible route to erasing student loan balances on a large scale.
That committee, using aprocess called negotiated rulemaking, will meet several times over the course of a few months. Any proposal they come up with could take a long time to become reality and could be undone by a future administration.
In the meantime, Biden is encouraging borrowers to sign up for his new income-driven repayment plan, also known as Saving on a Valuable Education (SAVE). Under SAVE, borrowers who make less than a certain amount, as determined by family size, could see their payments set at $0.
Borrowers who were enrolled in another income-based option called Revised Pay As You Earn (REPAYE) were automatically signed up. Others have to apply.
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