Biden administration cancels another $1.2 billion in student loans for public sector workers

The Biden administration is canceling an additional $1.2 billion in student loans for borrowers who work in public service by modifying an existing loan forgiveness program.

The relief for about 35,000 borrowers was announced Thursday by the Department of Education and came through changes to the Public Service Forgiveness program, which benefits workers such as teachers, nurses and firefighters. Those eligible for debt forgiveness have their remaining loan balances eliminated after making 120 qualifying monthly payments.

“These 35,000 borrowers approved for debt forgiveness today are public service workers—teachers, nurses, law enforcement officers, and first responders who have dedicated their lives to strengthening their communities—and thanks to the fixes we’ve made to public service debt forgiveness, they will now have more room to provide for themselves and their families,” Biden said in a statement.

The Public Service Loan Forgiveness program was created by Congress in 2007, but many borrowers were unable to get the forgiveness they worked for because of strict rules and mistakes lenders made in counting their payments. Under the Biden administration, some rules were adjusted, retroactively giving many borrowers credit for their 10 years of payments.

The announcement comes amid legal tensions over the administration’s broader student loan forgiveness plan, which is being challenged by Republican-led states. In June, judges in two federal cases opposing the new SAVE plan, which included lower monthly payments and a faster path to loan forgiveness, issued injunctions blocking the plan from going into effect.

But shortly afterward, the 10th Circuit Court of Appeals stayed one of the lawsuits, allowing the Education Department to move forward with reduced monthly payments.

Biden’s initial plan to cancel the debt once was struck down by the Supreme Court, which said the move exceeded the president’s authority.

With this latest round of loan forgiveness, the administration has now canceled $168.5 billion in student debt for 4.76 million borrowers, including $69.2 billion for 946 million borrowers through the Public Service Loan Forgiveness program.

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