Over 2 million borrowers have received $55 billion in student loan forgiveness under a variety of Biden administration student debt relief initiatives, according to the Education Department. And much more may be on the way in the coming months.
Here’s a breakdown.
Student Loan Forgiveness For 2 Million Borrowers So Far
The Biden administration has implemented a variety of student debt relief initiatives over the course of the last two years, resulting in significant relief for some borrowers. Buried in a statement about new student loan servicing contracts that the Education Department released last week were updated statistics on the student loan forgiveness resulting from these new programs.
“Under President Biden and Vice President Harris, the Department has completely revitalized targeted debt relief programs like Public Service Loan Forgiveness, Borrower Defense, and Total and Permanent Disability Discharge, approving $55 billion in discharges for more than two million borrowers to date,” the department said in the statement.
Student Loan Forgiveness Through PSLF Waiver
Nearly half of the approved relief has been implemented under the Limited PSLF Waiver, a one-time initiative that temporarily relaxed key requirements for the Public Service Loan Forgiveness program. PSLF can wipe out a borrower’s federal student loan debt in as little as 10 years for those who devote their careers to nonprofit or government work.
The Education Department has approved student loan forgiveness for nearly half a million borrowers through February 2023 under the Limited PSLF Waiver. And although the waiver ended last October, the department is continuing to process a backlog of PSLF applications. So additional loan forgiveness through the waiver initiative is expected during the next few months.
Student Loan Forgiveness For Borrowers Defrauded By Their School
The Biden administration has also approved billions of dollars in student loan forgiveness through initiatives under the Borrower Defense to Repayment program. That program can eliminate the federal student loan debt for borrowers who were misled or defrauded by their educational institution.
The administration wiped out $6 billion in federal student loan debt for borrowers who attended Corinthian Colleges, a chain of for-profit campuses (including Everest College, Heald College, and Wyotech) which collapsed in 2015. The administation also approved $4 billion in student loan forgiveness for borrowers who attended ITT Technical Institutes, another defunct for-profit institution.
Last fall, the Education Department agreed to a settlement to resolve Sweet v. Cardona, a class action lawsuit over stalled Borrower Defense applications, which will result in another $6 billion in student loan cancellation for hundreds of thousands of borrowers who attended dozens of mostly for-profit schools. The Supreme Court ruled last month following a legal challenge that the settlement relief can proceed.
Student Loan Forgiveness For Disabled Borrowers
Another Biden administration initiative to allow the Social Security Administration to share information on disabled student loan borrowers with the Education Department has resulted in $6 billion in automatic student loan forgiveness for 300,000 disabled borrowers.
That relief was provided through the Total and Permanent Disability (TPD) Discharge program, which can eliminate the federal student loan debt for borrowers who are unable to gainfully work due to a medical condition. Upcoming improvements to the TPD Discharge program that are set to go into effect later this summer will make it easier for many borrowers to receive relief through the TPD Discharge program.
Additional Student Loan Forgiveness Could Be Coming
While the $55 billion in student loan forgiveness approved so far is significant, it is still a relatively small portion of the nearly $2 trillion in outstanding student debt. But even more relief may be on the way.
The Education Department is in the early stages of implementing the IDR Account Adjustment, a temporary initiative that will give millions of borrowers retroactive “credit” toward a 20-year or 25-year loan forgiveness term under Income-Driven Repayment plans, even for borrowers who are not currently in that kind of plan. According to updated guidance published by the Biden administration last month, borrowers who receive enough credit to be eligible for student loan forgiveness under the adjustment will start to see their balances discharged by this fall.
Meanwhile, the Supreme Court will soon issue a decision on the most sweeping student loan forgiveness program yet — Biden’s plan to cancel $10,000 or $20,000 in student loan debt for over 30 million borrowers. The Congressional Budget Office estimated that the program could cost $400 billion. Legal challenges have blocked the program since last fall, so no borrower has received any relief under that initiative yet. The Supreme Court is widely expected to rule by the end of June.