ED Announces an Additional $9 Billion in Student Debt Forgiveness for 125,000 Borrowers
By Maria Carrasco, NASFAA Staff Reporter
The Department of Education (ED) on Wednesday announced additional $9 billion in federal student loan debt forgiveness for 125,000 borrowers through fixes to the income-driven repayment (IDR) and Public Service Loan Forgiveness (PSLF) programs, and automatic forgiveness for borrowers with total and permanent disabilities.
Specifically, ED announced that it would grant an additional $5.2 billion in forgiveness for 53,000 borrowers under PSLF, about $2.8 billion in forgiveness for nearly 51,000 borrowers under IDR, and $1.2 billion for about 22,000 borrowers who have a total or permanent disability and have been approved for discharge with the Social Security Administration. According to ED, Wednesday’s announcement brings the total of approved student loan debt forgiveness by the Biden administration to $127 billion for almost 3.6 million borrowers.
Education Secretary Miguel Cardona said the announcement “builds on everything our administration has already done to protect students from unaffordable debt.”
"For years, millions of eligible borrowers were unable to access the student debt relief they qualified for, but that's all changed thanks to President Biden and this administration's relentless efforts to fix the broken student loan system," Cardona said in a statement. "The Biden-Harris administration's laser-like focus on reducing red tape, addressing past administrative failures, and putting borrowers first have now resulted in a historic $127 billion in debt relief approved for nearly 3.6 million borrowers.”
Wednesday’s news adds on to ED’s announcement in July, when ED said it would forgive $39 billion in federal student loan debt to 804,000 eligible borrowers enrolled in income-driven repayment plans. The forgiveness is a result of “fixes” to “historical failures” of the IDR program, in which qualifying payments made under IDR plans were not accounted for. ED first announced in April 2022 that it would perform a one-time adjustment to count some borrowers’ accounts in long-term forbearances toward IDR forgiveness and PSLF.
However, ED’s fixes to the IDR program received scrutiny, with conservative groups filing a lawsuit that aimed to block ED from forgiving the $39 billion in student loan debt. But a federal judge dismissed the lawsuit, though the conservative groups later filed an appeal.
Rep. Virginia Foxx (R-N.C.), chairwoman of the House Committee on Education and the Workforce, wrote a letter with Sen. Bill Cassidy (R-La.), ranking member of the Senate Committee on Health, Education, Labor, and Pensions (HELP), questioning ED’s fixes to the IDR program and its student loan discharges. Foxx said Wednesday's announcement is the Biden administration’s “latest attempt to saddle taxpayers with $9 billion in unpaid student debt.”
“The Department of Education acts as if hardworking taxpayers are both willing and able to foot a tab worth billions of dollars that they do not owe,” Foxx said in a statement. “Either the Department is blissfully ignorant of its own binding legal constraints, or it is purposefully evading Congress’ approval and pushing forward with its own illegal charade – the latter is the obvious answer. Hardworking taxpayers deserve much better than this.”
However, during a press briefing on Wednesday, President Joe Biden said that the additional student loan forgiveness announcement is “life changing” for borrowers and their families, as well as the U.S. economy.
“By freeing millions of Americans from the crushing burden of student debt, it means they can go and get their lives in order,” Biden said. “They can think about buying a house, they can start a business, [and] they can start a family. This matters to their daily lives.”
Publication Date: 10/5/2023
You must be logged in to comment on this page.