The Biden administration has approved student loan forgiveness for more than 4.5 million borrowers nationwide through a variety of initiatives. And new data released by the Education Department last week shows the geographic breakdown of this relief for a key program, with some surprising results.
The administration has approved billions in loan forgiveness through reforms to the Public Service Loan Forgiveness program. PSLF can wipe out the debt for teachers, nurses, and others who commit to careers in the nonprofit and government fields. Public servants in every congressional district have benefited from these reforms, according to the new data.
“As we honor our nation’s teachers, we also celebrate the Biden-Harris Administration’s historic work to help ease the burden of student loans for educators as well as for nurses, firefighters, and other public service workers in every single part of the country,” said Secretary of Education Miguel Cardona in a statement last week. The newly-released PSLF data shows “that much-needed student loan relief is available for public servants no matter where they live—rural or urban, on the coast or in the heartland, and in every congressional district.”
Biden’s Fixes To PSLF Yield Significant Student Loan Forgiveness
The PSLF program can result in student loan forgiveness in as little as 10 years. Borrowers must make 120 payments on Direct loans under certain repayment plans while working in eligible public service employment to eventually qualify for a discharge.
But PSLF was riddled with problems since its creation in 2007. Borrowers were often not informed of the program’s requirements, or were steered into non-qualifying repayment plans or forbearances. Making a payment too early or a little late could result in months or even years not getting counted. And even borrowers who did everything right could still face processing errors, delays, and improper rejections that served as barriers to loan forgiveness. The result was an approval rate for PSLF that never exceeded 2% of applicants, totalling around 7,000 borrowers by early 2021.
The Biden administration’s various reforms to PSLF have dramatically improved the program’s success rate. These include one-time “waivers” to PSLF rules — such as the Limited PSLF Waiver and the IDR Account Adjustment — designed to rectify historical problems by retroactively crediting borrowers with time toward loan forgiveness for periods that may not have counted under prior regulations. In addition, the administration enacted new PSLF rules that went into effect last summer, which remove some barriers and administrative traps that can interfere with borrowers’ progress toward loan forgiveness, and broaden pathways to relief.
The result is that within three years, 876,000 individuals have received $62.8 billion in student loan forgiveness through PSLF, according to the Education Department’s most recent statistics.
New Data Shows Geographic Breakdown Of Student Loan Forgiveness
The Biden administration’s newly-released data breaks down this relief by congressional district.
“The data show that on average, more than 1,200 borrowers in each district have been approved for $87 million” in student loan forgiveness through PSLF, according to the Education Department in a statement last week. “Every district has been approved for at least $1 million in relief.”
The data indicates that five congressional districts benefited the most from this type of loan forgiveness. Outside of Washington, D.C. and Puerto Rico, New York’s 20th and 25th Congressional Districts, Florida’s 2nd, and Virginia’s 8th received the most loan forgiveness through PSLF, totalling more than $914 million. These districts include the cities of Albany, New York; Rochester, New York; Tallahassee, Florida; and Alexandria, Virginia — not traditionally-viewed liberal megacities such as New York City, Chicago, or San Francisco.
In addition, Maryland’s 5th Congressional District — which includes Calvert, Charles and St. Mary’s counties — received $292 million in loan forgiveness through PSLF. These three counties are more suburban and rural in nature, and don’t include major mid-Atlantic cities such as Baltimore.
PSLF Relief Is Part Of Broader Biden Student Loan Forgiveness Efforts
In addition to PSLF, the Biden administration has also been using targeted reforms to expand student loan forgiveness for borrowers through other programs.
The administration has approved $55 billion in loan forgiveness for 1.3 million borrowers through improvements to income-driven repayment plans. This includes the IDR Account Adjustment, which credits borrowers with time toward 20- or 25-year loan forgiveness under income-driven repayment plans. And it also includes Biden’s new SAVE plan, a new IDR option that can shorten the timeline for loan forgiveness to as little as 10 years for borrowers who took out smaller loans.
The Education Department has also approved close to $30 billion in student loan forgiveness for 1.6 million borrowers who were harmed by school misconduct. Hundreds of thousands of borrowers who attended a handful of notorious for-profit schools have received group-wide relief through these initiatives. Most recently, the administration approved millions in debt relief for former students of the Art Institutes.
New Student Loan Forgiveness Plan Expected To Debut This Fall
At the same time, the Biden administration is in the process of finalizing a new student loan forgiveness program. The plan, which the Education Department established under the Higher Education Act, will target relief for several groups of borrowers, including those who have experienced runaway interest or have been in repayment for two decades or longer. The department is expected to also offer a pathway to loan forgiveness based on hardship, and proposed regulations should be released within the next few weeks.
The new program must complete several additional administrative steps, including a public comment period that ends later in May, before it can go live. Officials have indicated that they hope to launch this new debt relief plan by this fall. However, observers expect the program to get challenged in court.
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