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News World Americas US politics Biden to overhaul student loan system and cut cost for more than 500,000 people Teachers and military members set to benefit from temporary changes
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Your support makes all the difference. Read more US President Joe Biden ’s administration has announced measures that will allow 550,000 Americans to almost clear their student loan debts, according to reports.
The education department , in a statement on Wednesday, said it is temporarily rolling back many of the toughest requirements for a programme covering 1.3m public servants with student loan debts.
After launching in 2007, as few as 5,500 public servants have been able to clear their student debts through the programme, with 90 per cent seeing their applications rejected, according to The Associated Press.
Following Wednesday’s announcement, a further 550,000 of the 1.3m workers signed up to the Public Service Loan Forgiveness will be eligible for almost clearing their debts, the department said.
There had previously been restraints on who was eligible for loan forgiveness, which required public servants to repay a federal student loan for 10 years before the remainder was cleared, or forgiven.
Roughly 22,000 borrowers who have worked 10 years in a public service job will be eligible for loan forgiveness despite the type of loan or repayment plan they have, it was said.
On top of that, roughly 27,000 people who made loan payments who were not eligible previously will also be acknowledged, bringing 27,000 more closer to clearing their student loans.
Among those who will benefit are teachers, social workers, military members and other public servants, who have before October 2022 to apply.
In a statement following the announcement,Education Secretary Miguel Cardona said: “Borrowers who devote a decade of their lives to public service should be able to rely on the promise of Public Service Loan Forgiveness.”
“The system has not delivered on that promise to date, but that is about to change for many borrowers.”
After years of criticism of the programme, military members will also be allowed to count active service time towards their loan forgiveness, the department said.
Mr Biden has been under pressure from progressives in his party to cancel as much as $55,000 (£40,500) in student loan debts for all Americans, but has avoided doing so, with smaller measures instead targeting specific groups.
Further changes are expected to address the long term issues with federal student loan repayments, with the education department holding hearings on the matter this week.
Additional reporting by The Associated Press.
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