Education Department Targets Roughly $6 Billion in New Student Loan Relief

The United States Department of Education announced Wednesday it has identified 100,000 student loan borrowers who are eligible for $6.2 billion in student debt forgiveness.

The announcement expands upon the Public Service Loan Forgiveness (PSLF) program, which, while created 15 years ago, only granted a small fraction of applicants student loan forgiveness until 2021, CNN reported. The expansion, first announced in October 2021, allows for more public service workers who were previously ineligible for the program to relieve some of their student debt.

The PSLF program aims to wipe away debt for those working full-time for the government or a nonprofit after 120 "qualifying payments," which adds up to ten years of monthly payments. However, complicated and poorly explained rules on what a qualifying payment is caused low approval rates and backlash from borrowers, leading the Biden administration to announce the Limited PSLF Waiver in October, Forbes reported.

The waiver, which remains valid until October 31 of this year, grants credit for past periods of repayment that would not have previously counted as qualifying payments and includes payments made on other loans like FFEL or Perkins as long as they are consolidated into a Direct Consolidation Loan, according to the Federal Student Aid website.

In a statement, U.S. Secretary of Education Miguel Cardona said the country's public service workers "must be able to rely on the promise" of the PSLF program.

"The Biden-Harris administration is delivering on that promise by helping more and more eligible borrowers get their loan balances forgiven," he said. "The PSLF announcement made today means more of our dedicated teachers, nurses, first responders, servicemembers, and many other public service workers will get meaningful relief."

However, there is still a long way to go when it comes to the Biden administration's campaign goal of slashing $10,000 of student debt for each of the more than 43 million U.S. borrowers. According to statistics from the Education Data Initiative, student debt in the U.S. totals $1.749 trillion. About 15 percent of Americans report having outstanding undergraduate student debt, while another 7 percent report having outstanding postgraduate debt.

Usually, student loan debt grows six times faster than the country's economy does, but toward the end of 2021, that total declined for the first time in history, the data added.

So far, not all the borrowers eligible for the PSLF waiver have been notified, as they are being notified on a rolling basis, the Education Department told CNN. The department did not specify when everyone who is eligible would be notified.

Update 03/09/22 1:25 p.m. ET: This story was updated to add more information.

Washington D.C., student loan
The Department of Education announced that 100,000 public service workers qualify for student debt forgiveness. Above, student loan borrowers demand President Joe Biden cancel student loan debt during a demonstration outside the White House on February 16 in Washington, D.C. Photo by Paul Morigi/Getty Images for We The 45 Million