Biden 'cancels' nearly $6B in student loans for public sector workers

President Biden announced Thursday that $5.8 billion in student loans would be "canceled" for 78,000 borrowers working in the public sector, bringing his administration's total student debt write-offs to $143.6 billion.

Biden pledged to find other avenues for tackling debt relief last year after the Supreme Court in June blocked his broader plan to cancel $430 billion in student loan debt, deeming it unconstitutional.

Republicans have often criticized student debt cancellation plans, noting that the loans will be transferred to taxpayers who will ultimately end up footing the bill.

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The latest plan comes as Biden seeks re-election in November and as the national debt has already shot past $34.5 trillion. By comparison, just four decades ago, the national debt hovered around $907 billion.

Thursday's announcement will see public service employees such as teachers, nurses and firefighters have their debt written off under the Public Service Loan Forgiveness Program (PSLF), an initiative created in 2007 and signed into law by President George W. Bush to forgive student debt for Americans who go into public service. It also applies to nonprofit employees.

Biden says the plans bring much-needed relief to borrowers with their debt becoming "a barrier to opportunity."

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"These public service workers have dedicated their careers to serving their communities, but because of past administrative failures, never got the relief they were entitled to under the law. Because of the fixes my administration has made, we have now canceled student debt for over 870,000 public service workers – compared to only about 7,000 public service borrowers ever receiving forgiveness prior to my administration. 

"And through all of our various student debt relief actions, nearly four million Americans have had their student debt canceled under my administration."

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As of June 2023, about 43.4 million U.S. student loan recipients had $1.63 trillion in outstanding loans, according to the Federal Student Aid website. Higher education debt has tripled since the 2008 financial crisis.

Starting next week, borrowers who receive this forgiveness will get an email from Biden congratulating them on their relief. 

In addition, Biden will also send emails directly to nearly 380,000 additional public service workers who are within two years of debt forgiveness through PSLF. The president’s email to these borrowers will thank them for serving their community and will notify them that if they continue their work in public service, they are on track to have their debt canceled within one or two years.

Reuters contributed to this report.