By Maria Carrasco, NASFAA Staff Reporter
With just a week left until a new presidential administration takes over, the Department of Education (ED) on Monday announced new approvals for student loan debt forgiveness for over 150,000 borrowers through borrower defense, Public Service Loan Forgiveness (PSLF), and total and permanent disabilities discharges.
Specifically, Monday’s announcement included approved student loan forgiveness for 6,100 borrowers through the PSLF program, totaling $465 million in relief – which is part of the Biden administration’s initiative of overhauling the PSLF program.
The administration also approved 61,000 borrowers, totaling $2.5 billion, for total and permanent disability discharges of their student loan debt.
Additionally, 85,000 borrowers were approved forgiveness, totaling $1.26 billion, through borrower defense to repayment. Out of that number, 73,600 of those borrowers attended any school owned by the Center for Excellence in Higher Education, 11,000 of those borrowers attended any location of Drake College of Business, and 280 borrowers attended the Criminal Justice Program at Lincoln Technical Institute’s campus in Lowell, Massachusetts. These borrowers will receive relief automatically, regardless of whether they submitted a borrower defense to repayment application, ED clarified.
In Monday’s press release, ED noted that last week it emailed all borrowers previously approved for group borrower defense discharges with a letter “reaffirming their entitlement to a full discharge” of their remaining student loan balances. This email was sent to borrowers whose loans have been fully discharged, as well as those that are still in the process of being discharged. Additionally, ED noted that borrowers will receive a case number in order to make it easier for them to provide proof of their discharge.
“Four years ago, President Biden made a promise to fix a broken student loan system,” Education Secretary Miguel Cardona said in a statement. “Today, life-changing student debt relief is possible for more than five million borrowers—more than any other administration in history.”
Since taking office, the Biden administration has forgiven $183.6 billion in student loan debt for over 5 million borrowers, including Monday's announcement.
It is unclear whether the administration will announce any additional forgiveness before President-elect Donald Trump takes office next week.
“My administration has taken historic action to reduce the burden of student debt, hold bad actors accountable, and fight on behalf of students across the country,” President Joe Biden said in a statement. “This includes fixing the broken Public Service Loan Forgiveness (PSLF) program and ensuring over 1 million public service workers receive the student loan relief they are entitled to under the law.”
Rep. Tim Walberg (R-Mich.), chair of the House Education and Workforce Committee, said on Monday that the Biden administration’s efforts to forgive student loan debt continue to ignore judicial rulings, which have blocked several student loan debt relief initiatives.
“When this administration entered the White House, it immediately began working on handouts, with zero accountability, for which Biden-Harris expected taxpayers — even if they never went to college — to pick up the tab,” Walberg said in a statement. “Instead, the administration should have been working to address the fact that student loan debt is too high, completion rates are too low, and far too many students are left worse off after paying for college than if they had never enrolled in the first place.”
Publication Date: 1/14/2025
Lynne B | 1/18/2025 1:30:06 AM
Many opponents of loan forgiveness fail to consider the impact of interest, claiming that it is a free handout. It is important to recognize that loan forgiveness does not equate to free education. The reality is that once people have completed their education and in-school deferment has ended, their initial loan payments do NOT reduce principal. During the early years of employment after college, people are just starting out and making lower income and are therefore forced into payment plans with lower payments that are primarily applied only to the accrued interest.
In fact, the principal amount on these loans often gradually INCREASE because the initial loan payments do not even cover the accruing interest. Many people pay THOUSANDS and THOUSANDS toward interest, without significantly reducing the principal on their loans, so the interest just continues on and on. So NO, these folks are NOT receiving a ‘free ride’. In reality, they are actually receiving adjustments for the INTEREST that they’ve paid over the years.
And before you say, ‘Oh but the interest is tax deductible!’, that is not entirely true. At most only $2,500 in interest is tax deductible, which equates to somewhere between $500-$625 in tax savings, which is far less than the interest paid throughout the year and the increase in principal balance of the loans due to compounding interest.
So quit saying people are receiving handouts, when in fact the government is finally correcting a flaw in the student loan system that has inflicted undue hardship on American citizens for YEARS.
David S | 1/14/2025 4:20:36 PM
Susie - the terms of the loans applicable to those promissory notes entitle them, when they qualify, Public Service Loan Forgiveness and cancellation under Defense to Repayment. This is not an arbitrary decision by the Biden administration, nor is it illegal.
Susie E | 1/14/2025 3:52:19 PM
Students signed promissory notes for these loans. They should have to repay them. No one forced them to get a federal loan. I paid mine back. Our country is bankrupt with debt. Why pick one program to forgive? The Supreme Court said this is illegal.
Justin B | 1/14/2025 1:0:48 PM
For the PSLF program if they were eligible per the 120 payments this is great but for anyone currently on PSLF we are left in limbo due to the SAVE plan. This is forcing all PSLF and income based plans to be on hold and the current forced forbearance being applied does not count towards payment counts. This I feel needs to just be reverted to the prior REPAYE plan and allow current PSLF borrowers to get payment counts again.
Robert F | 1/14/2025 11:10:03 AM
These debt relief programs are just that. They were not intended to fix the myriad problems nor posited as a solution to the federal loan programs issues. They are relief for the folks who ran afoul of these problematic loan programs exacerbated by an administration that refused to use the tools that the law allows. It appears that ignoring these tools is not enough. Who will be surprised when the new administration removes these relief tools altogether. Ironically it makes one yearn for the days of the "kinder, gentler" fiscally conservative administration.
Darren C | 1/14/2025 10:51:25 AM
The last 4 years have been a confusing time for student borrowers. Students as well as fellow higher ED professionals have had to navigate misleading headlines and empty promises. Unfortunately, handouts are just a band aid to avoid addressing deep seeded, long-term issues in higher education. Using taxpayer funds to forgive student debt will never address the fact that student loan debt is too high, completion rates are too low, and far too many students are left worse off after paying for college than if they had never enrolled in the first place. Moving away from handouts is going to be a welcome change and we look forward to a more consistent approach when it comes to higher ED and student loan repayment.
Very bright days ahead for accountability, consistency, commonsense and a more thoughtful use of taxpayer funds.
David S | 1/14/2025 9:13:38 AM
When the chair of the House Education Committee calls following laws "handouts," it does not fill me with optimism for the next few years. Unless the Biden administration has more loans to forgive in the coming days (and like these, by fully following the law), these will likely be the last loans we see forgiven until at best 2029.
Very dark days ahead for access, affordability and opportunity.
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