27 September 2023

UNITED STATES: Thousands eligible for loan forgiveness

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The United States Department of Education has identified around 100,000 borrowers who are now eligible to have their student debt wiped following changes to the Public Service Loan Forgiveness (PSLF) program.

The cancellations are expected to total about $US6.2 billion ($A8.6 billion) in Federal student debt relief.

In a statement, the Department said not all the eligible borrowers had been notified of their debt forgiveness and this would be done on a rolling basis.

The announcement marks the latest effort by the Administration of President Joe Biden to make it easier for some borrowers to qualify for loan forgiveness under existing programs.

The approach still falls far short of Mr Biden’s campaign pledge to support cancelling $US10,000 ($A13,900) for each of the roughly 43 million people who currently hold Federal student loan debt.

However, Secretary of Education, Miguel Cardona said the latest moves were a step in the right direction.

“This PSLF announcement means more of our dedicated teachers, nurses, first responders, service members, and many other Public Service workers will get meaningful relief,” Mr Cardona (pictured) said.

The PSLF program promises to wipe away remaining Federal student loan debt after an eligible Public Service worker makes 10 years of monthly payments.

It was created about 15 years ago, but a very small percentage of people who applied had received forgiveness before 2021.

Many borrowers criticised the program as difficult to navigate and some said they found out they weren’t eligible for forgiveness only after making what they thought were a decade’s worth of qualifying payments.

Washington, 10 March 2022

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