Another slew of student loan debt has been wiped out. Approved by the Biden administration, this latest batch of federal loan debt eligible for cancellation expands on the public sector workers with an additional 45,000 people eligible, adding to the $8.1 billion total in loan forgiveness. Here’s what you need to know.
Who qualifies for this round of student loan forgiveness?
According to CNN, the Biden administration has approved the cancellation of federal student debt for an additional 45,000 people who work in the public sector, citing the Department of Education. This new group of forgiveness is in addition to the 100,000 borrowers previously declared eligible through the Public Service Loan Forgiveness (PSLF) programs.
The average balance of approved PSLF loans discharged per person in 2021 was $76,906, according to EducationData.org. This implies that approximately $3.4 billion in debt will be wiped out for the additional 45,000 people who are now eligible for PSLF loan discharge.
In total, the PSLF program has approved the cancellation of federal student loan debt for close to 145,000 borrowers, totaling $8.1 billion.
How do you claim student loan forgiveness through the PSLF program?
Last year, the eligibility for the PSLF program was expanded temporarily through October 31, 2022, to include borrowers who didn’t first qualify. The temporary waiver means it doesn’t matter what kind of federal student loan someone has or what repayment plan they were enrolled in. Instead, it was offered to public service employees who work full-time at a qualifying employer.
For the most part, borrowers won’t have to take any action to have the Department of Education review and update the qualified payments. However, those who have an older Federal Family Education Loan will need to consolidate them into a Direct Loan before October 31, but payments made before consolidation will still count towards the quota for relief.
Anyone who already has Direct Loans but has not submitted employment certification forms for past periods of repayment needs to do that before October 31, too.
What’s happening with the promise from Biden to cancel student debt for all?
The last update from the Biden administration’s campaign promise to cancel student debt was weeks ago. At the time, rumors were floating around saying there would be a cap at $10,000 in forgiveness for anyone who makes less than $150,000.
Until that plan is ironed out, the administration has been taking action for specific groups of student borrowers, including those defrauded by for-profit colleges, and students who have wrongly been denied forgiveness through the PSL forgiveness program.