WASHINGTON (CN) — The Biden administration Thursday announced its approval of nearly $5 billion in student debt cancellation for public service workers, the latest step by the White House to take full advantage of an existing federal program aimed at alleviating economic burdens on public servants.
With its latest round of debt cancellations — to the tune of roughly $4.7 billion that covers the debt of more than 60,000 people — the administration says one million Americans have now had their student loans forgiven through the Public Service Loan Forgiveness program.
The debt forgiveness scheme, implemented as part of the 2007 College Cost Reduction and Access Act, offers loan cancellation to teachers, nurses, first responders and other public servants who have worked full-time for ten years and who are making regular payments on their existing debt.
But the program, the Biden administration said, has been drastically underused. Just around 7,000 people had their student loans canceled before January 2021.
That was largely thanks to maladministration by the federal government, White House Deputy Chief of Staff Natalie Quillian said during a call with reporters Wednesday morning. She pointed out that the loan forgiveness scheme was “riddled” with administrative errors. People seeking debt relief were denied access to the program or weren’t given credit by loan servicers for previous payments, she said.
“They were promised student loan forgiveness after 10 years of public service and 10 years of payments, but for too long, the program failed to live up to that commitment,” Quillian told reporters.
Education Secretary Miguel Cardona said the government had been breaking its promise to pay back public servants who had committed to serving the “greater good,” and bashed former Education Secretary Betsy DeVos for not acting sooner.
“These Americans acted in good faith,” he said. “They paid their student loans while they were working in the public interest, but instead of fixing Public Service Loan Forgiveness, my predecessor was more focused on handouts for predatory, for-profit colleges.”
Cardona lauded the Biden administration’s progress in reforming the public service forgiveness program, noting that when he was appointed to the Education Department people had referred to the scheme as a “cruel joke” and a “nightmare.”
But after meeting with stakeholders, enacting new rules and streamlining the process, debt cancellations under the public service program have skyrocketed, the education secretary said. The White House has overseen a more than 14,000% increase in loan forgiveness for public servants in the past four years, he noted.
“If you ever wonder if change is possible, if you ever wonder if what’s broken can be fixed … just look at what President Biden and Vice President Harris did for these one million public servants across the country today,” said Cardona.
Quillian added that efforts to restore student loan forgiveness will incentivize people to pursue careers in public service.
“This milestone isn’t just a number, it’s life-changing debt relief for over a million people who now have more breathing room to buy homes, start small businesses, save for retirement and more,” she said.
The White House has for years attempted to cancel tranches of student debt for Americans struggling under the weight of crushing loans. The administration’s campaign, however, has largely been hampered by Republican-led lawsuits that have tied any relief up in the courts.
Despite that, Biden scored a major victory earlier this month after a federal judge allowed a court-ordered hold on the latest round of student loan forgiveness to expire. A Georgia court had paused the move in September but refused to extend the stay, opting instead to hand the case to a Missouri court for further consideration.
The administration had proposed a federal rule that would do away with up to $20,000 in debt for Americans who have been the victim of increased interest on their loans.
The Supreme Court in 2023 ruled that the Biden White House could not legally follow through on a separate $400 billion plan to cancel student debt for as many as 43 million Americans. The decision, though, did not affect the existing Public Service Loan Forgiveness program.