US President Joe Biden speaks about student loan relief at Madison College in Madison, Wisconsin, on April 8, 2024.
- The Biden administration announced it will cancel $1.2 billion in student debt for 35,000 workers.
- The relief is a result of the U.S. Department of Education's fixes to the Public Service Loan Forgiveness program.
The Biden administration announced Thursday it will cancel $1.2 billion in student debt for 35,000 workers, as a result of its recent fixes to a popular debt relief program for public service workers.
"Once again, the Biden-Harris administration delivers on its historic efforts to reduce the burden of student debt — making needed and long overdue improvements to the Public Service Loan Forgiveness Program," U.S. Secretary of Education Miguel Cardona said in a statement.
The PSLF program, signed into law by President George W. Bush in 2007, allows certain not-for-profit and government employees to have their federal student loans canceled after a decade in repayment. But the program has been plagued by problems, making people who qualified for the relief a rarity in the past. Often, borrowers believed they were on track to loan cancellation only to learn at some point that they didn't qualify on a technicality, such as their loan type or repayment plan.
Get top local stories in DFW delivered to you every morning. Sign up for NBC DFW's News Headlines newsletter.
Under the Biden administration, the U.S. Department of Education gave borrowers a second chance to qualify, as long as they'd been making payments on their loans and working for an eligible employer. Borrowers were able to consolidate their loans and get credit for previously ineligible periods via a waiver opportunity that expired in October 2022.
The Biden administration has so far cleared $69.2 billion in student debt for 946,000 borrowers under PSLF, according to the Education Department. Before President Joe Biden took office, just 7,000 people had received relief through the program.
Money Report
Legal battles have affected student loan forgiveness
After the Supreme Court struck down the Biden administration's sweeping debt cancellation plan last summer, the department examined its existing authority to reduce and eliminate borrowers' balances.
Mainly through fixes to long-troubled loan relief initiatives, the Biden administration has now approved nearly $169 billion in loan forgiveness for roughly 4.8 million people.
More from Personal Finance:
What Project 2025 could mean for your wallet
'Rentvesting' can be a path to owning a home
3 money moves to make ahead of a Fed rate cut
Thursday's announcement included smaller numbers than the administration's previous waves of relief. That's likely due to the recent lawsuits against the Education Department's new affordable repayment plan for borrowers, known as SAVE. That plan led to expedited loan forgiveness for hundreds of thousands of people.
However, in late June, two federal judges in Kansas and Missouri temporarily halted significant parts of SAVE, after a number of red states argued that the department overstepped its authority and essentially was trying to find a roundabout way to forgive student debt after the Supreme Court's decision.
