During his presidential campaign, Joe Biden promised to address America’s student debt issue by lowering college costs and canceling up to $10,000 in debt per borrower. After more than a year in office, he and Democrats in Congress have failed to approve legislation to forgive student loan debt. On the other hand, nonprofit employees have profited significantly from the Biden administration’s student loan programs.
Moreover, students have benefited from significant sums of student debt forgiveness at a never-before-seen rate, owing to a combination of measures that most people are unaware of. While tens of millions of other Americans continue to be plagued by enormous student loan obligations, government and other nonprofit workers have received considerable debt forgiveness.
The College Cost Reduction and Access Act of 2007 established Public Service Loan Forgiveness (PSLF). Borrowers who work full-time for a nonprofit organization can have all of their student debt forgiven after making 120 qualified monthly payments. Many borrowers engage in a federal income-based repayment plan before earning forgiveness.
During the epidemic, President Trump and Congress stopped federal student loan payments in early 2020. Instead of requiring debtors to continue making payments to reach the 120-payment barrier, they allowed stopped “payments” to count. Biden has extended the halt three times since taking office, the most recent in December 2021.
Furthermore, the Public Service Loan Forfeiture (PSLF) program has helped approximately 471,000 borrowers, most government employees. PSLF permits borrowers to spend at least two years without making a single federal student loan payment, while the government considers such non-payments to be “payments.” Over the next five years, the initiative is estimated to cost taxpayers more than $1.23 billion.
According to USED statistics, more than 60,000 borrowers have gotten some forgiveness under a PSLF program during the last year. In the 2020-2021 timeframe, the average loan amount forgiven for borrowers under the PSLF program was $94,907. Those who participated in Biden’s more minor Temporary Expanded Public Service Loan Forgiveness program earned average loan forgiveness of $44,324 each year.