Biden cancels $5.8 billion in student debt for public service workers
Biden cancels $5.8 billion in student debt for public service workers
This week, the Biden administration approved an additional $5.8 billion in student debt relief. This will affect nearly 78,000 people who work in certain nonprofit or government jobs.
It’s part of an ongoing effort to make sure borrowers who are eligible for forgiveness under the long-troubled Public Service Loan Forgiveness program actually get it.
Let’s say you’re a public school teacher with a bunch of student debt. Under the Public Service Loan Forgiveness program, you could make payments on that debt for a certain number of years and then the rest would be forgiven.
“Unfortunately in the past, it did not work as intended,” noted Abby Shafroth with the National Consumer Law Center.
She points out that a lot of people missed out on that relief due to servicing errors, bureaucratic hurdles and a lack of outreach.
Now, the government is looking hard at what borrowers have paid in the past and is retroactively giving them credit for payments that should have counted towards forgiveness.
“That means for public servants, but for a wider range of people too, we’re going to have a more accurate payment history,” said James Kvaal, the United States Under Secretary of Education. “And if you’ve been making your payments over a number of years, you may be eligible for loan forgiveness.”
Kvaal added that there are millions of people with older federal loans (such as Federal Family Education Loans) who could also benefit from these programs. But they need to consolidate their loans by April 30 in order to get credit for past payments.
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