On Jan. 19, the Biden administration announced its latest round of student debt relief, this time saying it has forgiven nearly $5 billion more in student loans for 74,000 borrowers.
However, borrowers on student loan-focused Reddit forums debated whether the White House was just taking credit for a preexisting program that would have forgiven their student loans anyway. Meanwhile, some people on X wondered how Biden could reinstate a seemingly new program that eliminates student debt after the Supreme Court blocked the administration’s attempt at widespread loan debt relief last year.
THE QUESTION
Is the Biden administration’s latest $4.9 billion in student debt relief a new program?
THE SOURCES
THE ANSWER
No, the Biden administration’s latest $4.9 billion in student debt relief is not a new program.
WHAT WE FOUND
The Biden administration announced on Jan. 19 that it would be forgiving an additional $4.9 billion in student loan debt for 74,000 borrowers. The debt relief is a result of adjustments to income-driven repayment (IDR) plan payment counts and through the public service loan forgiveness (PSLF) program. This is not a new student loan forgiveness program.
Both IDR and PSLF plans are programs that offer borrowers a route to eventual student loan forgiveness and predate Biden’s presidency.
The U.S. Department of Education clarified that $1.7 billion of the $4.9 billion total will go to 29,700 borrowers by counting payments that previously were not counted toward forgiveness through their IDR plan. The remaining $3.2 billion will go to 43,900 borrowers on PSLF plans, including borrowers who benefitted from the administration’s PSLF waiver and regulatory fixes to the program.
The Biden administration did not announce when the latest beneficiaries will see their debts forgiven, but no action will be required by the borrowers.
IDR plans are repayment plans in which a borrower repays a certain percentage of their income each month, which then gives them credit toward student loan forgiveness, the Education Department’s Federal Student Aid website says. All of the borrower’s loans are forgiven after they’ve made 20 to 25 years worth of repayments depending on the exact plan. The first IDR plan was introduced in 1994, the Congressional Budget Office (CBO) says.
PSLF plans are available for borrowers who work full-time for a government or a qualifying not-for-profit organization, Federal Student Aid says. PSLF plans forgive the borrower’s remaining loans after 10 years of qualifying monthly payments.
The PSLF program was established in 2007 and began accepting applications for loan forgiveness through the program in 2017. The Department of Education said only about 7,000 PSLF borrowers had received forgiveness through the program prior to its October 2021 changes to PSLF, and since then 793,400 PSLF borrowers have had their loans forgiven.
Borrowers on IDR plans do not have to apply to have their loans forgiven, the CBO says. However, people in the PSLF program do have to apply to get their loans forgiven. The group of people included in the latest debt relief announcement already submitted applications for forgiveness.
This announcement is separate from the one made by the Department of Education last week, which said it will be fast-tracking additional loan forgiveness through early implementation of its newest IDR plan, the Saving on a Valuable Education (SAVE) plan.
In last week’s announcement, the Department of Education said people who borrowed $12,000 or less for college, are enrolled in the SAVE Plan and have made 10 years of payments will also see their debts automatically canceled starting next month.
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