The Department of Education announced Tuesday that it would be implementing new criteria for a series of existing student loan forgiveness programs, potentially expanding eligibility to millions of borrowers.
Under the new actions announced by the agency, 40,000 student loan borrowers would immediately become eligible for student loan forgiveness, while an additional 3.6 million borrowers would eventually become eligible.
The changes expand eligibility for a series of existing student loan forgiveness programs for low-income borrowers and public service employees.
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“Today, the Department of Education will begin to remedy years of administrative failures that effectively denied the promise of loan forgiveness to certain borrowers enrolled in [income driven repayment] plans,” Education Secretary Miguel Cardona said in a press release. “These actions once again demonstrate the Biden-Harris administration’s commitment to delivering meaningful debt relief and ensuring federal student loan programs are administered fairly and effectively.”
The department’s expansion of student loan forgiveness comes after the Biden administration earlier this month announced it was extending a freeze on payment collection and interest on federally held student loans until the end of August.
Administration officials, including White House press secretary Jen Psaki, have publicly flirted with forgiving a significant amount of federally held student loans, something that liberal activists and some Democratic politicians, including Senate Majority Leader Chuck Schumer, have called for. Biden is under increasing pressure from some within the party, such as Sen. Elizabeth Warren of Massachusetts, to forgive more student debt ahead of the midterm elections.
The Education Department’s Tuesday actions regarding the Public Service Loan Forgiveness Program and the Income Driven Repayment program are aimed to “address historical failures in the administration of the federal student loan program and support student loan borrowers through the pandemic.”
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The announced actions include expanded tracking of payments made (one of the criteria to qualify for income-driven repayment), ending a practice of “forbearance steering,” in which borrowers eligible for lower monthly payments or forgiveness had their loans entered into forbearance, and reviewing past payment records for inaccuracies.
