26 September 2023

UNITED STATES: Student debt relief in the billions

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Temporary changes to the troubled Public Service Loan Forgiveness Program have resulted in more than 110,000 Americans with student debt receiving around $US6.8 billion ($A9.75 million) in relief, new figures from the Department of Education reveal.

The Department said hundreds of thousands more people could still see their debt discharged as part of the effort.

It said the average amount of debt reduction per borrower was close to $US60,000 ($A86,000).

The program was signed into law by then-President George W. Bush in 2007, and allows for non-profit and Government employees to have their Federal student loans cancelled after 10 years, or 120 payments.

The Consumer Financial Protection Bureau estimates that one-quarter of American workers could be eligible.

However, the program has been plagued by problems, making people who actually get the relief a rarity.

Borrowers often believed they were paying their way to loan cancellation only to discover at some point in the process they didn’t qualify, usually for confusing technical reasons.

Lenders have been blamed for misleading borrowers and botching their timelines.

Reforms under the Administration of President Joe Biden include reassessing borrowers’ timelines and counting some payments that were previously ineligible.

Meanwhile, 230 Federal employees have been recognised in the Presidential Rank Awards, “for sustained and extraordinary accomplishment”.

Also celebrated at the awards, which are part of Public Service Recognition Week,

were 44 finalists, including some teams, for the Samuel J. Heyman Service to America Medals.

Nicknamed the ‘Sammies’ and organised by the Partnership for Public Service, finalists include ‘for coordinating housing and services for Afghan refugees after the US withdrawal from Afghanistan’ and ‘for spearheading efforts to create disability education programs that have reached 300,000 children around the world’.

The winners are to be named at a Kennedy Centre gala in September.

Washington, 6 May 2022

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