Department of Education confirms $10 billion in student debt relief ahead of Biden’s White House announcement
The DoE has written off billions of dollars for certain borrowers as part of an extension of the Public Service Loan Forgiveness (PSLF) program.
A statement from the Department of Education has confirmed that the Public Service Loan Forgiveness (PSLF) program has now provided more than $10 billion in debt relief for more than 175,000 borrowers.
The new-look PSLF has only been in operation for 10 months after changes were made last October to widen eligibility requirements for the support. Public servants with federal loans can have a proportion of their debts cancelled with the typical recipient getting the equivalent of a year’s worth of payments written off.
Secretary of Education Miguel Cardona wrote: “Today’s announcement that we’ve surpassed $10 billion in forgiveness for more than 175,000 public servants shows that the Biden-Harris administration’s efforts to cut red tape are turning the Public Service Loan Forgiveness program from a promise broken into a promise kept.
“We’re committed to helping borrowers who choose to pursue careers in education, public health, social work, law enforcement, and other critical fields receive the benefits to which they’re entitled for leading lives of service.”
When will President Biden announce further student debt forgiveness?
While campaigning in the 2020 presidential election Joe Biden pledged to provide up to $10,00 in student debt cancellation for borrowers. After 18 months he has introduced a series of targeted initiatives designed to help specific groups but is yet to offer the sort of widespread debt forgiveness that he campaigned on.
However multiple sources are reporting that he is poised to announce a sweeping executive order cancelling $10,000 in student loan debt for borrowers earning less than $125,000. The announcement could happen as early as Wednesday as Biden returns to the White House after a spell in Delaware.
In total, there are 43 million student debt borrowers in the United States who owe a combined $1.6 trillion. Two-thirds of borrowers owe in excess of $10,000.
Will this measure appease Biden’s critics?
The long-awaited widespread student loan forgiveness will allow Biden to tick off a major campaign pledge, and one which affects a demographic who he desperately needs to keep engaged ahead of the midterms. However the relatively low amount on offer will leave some feeling that he could have done more. A report from LendingTree found that the average level of student debt is currently $32,731 per person.
Key Democrats like Sen. Elizabeth Warren had called for $50,000 per borrower to be wiped off, but that was likely deemed politically risky at a time when the US is dealing with high inflation. Republicans have argued that any level of widespread student loan debt would be irresponsible and unfair on those who have already paid off their debts.
To appease the left wing of his own party, Biden is also expected to announce an extension of the student debt pause that has been in place since the start of the pandemic. The current halt is due to end on 31 August but it is thought that a four-month extension is on the cards.