Biden Administration Effectively Cancels $175 Billion Student Loans Granted Under Existing Forgiveness Programs
President Joe BIden announced early this month that his administration has cancelled $175 billion student loans availed through educational loans with relief and forgiveness mechanics. A huge portion of the cancellations was given to more than one million borrowers who took out college loans under the 2007 Public Service Loan Forgiveness (PSLF) program. The latter was created in connection with the passing of the College Cost Reduction and Access Act in the same year.
The PSLF program was meant to encourage college students to work with the government or with nonprofit entities for at least 10 years. In return, and after the said period they can apply to have the remaining balance of their student loans cancelled.
The PSLF Program Upgraded and Restored Under the Biden Administration
Unfortunately since 2017 onwards under the Trump administration, the majority of the public service employees who applied for PSLF loan relief were denied approval based on some vague and complicated eligibility rules and conditions.
Nevertheless, the Biden administration worked on the loan forgiveness issues for about two years in order to upgrade and improve the efficiency of the PSLF program. Doing so permitted cancellation of 175 billion student loans; including loans that were forgiven because they met the requirements of an income-driven payment plan. Additionally student borrowers who were cheated by their respective schools were also provided with relief in accordance with a 1994 loan forgiveness ruling.
