White House cancels $1.2B in student loan debt, impacting healthcare

Photo: Walter Bibikow/Getty Images

As the president prepares to leave the race and end his bid for reelection, the Biden administration announced last week that it's canceling an additional $1.2 billion in student debt for more than 35,000 public service workers, including those in the healthcare industry.

This comes on the heels of the decision in May to release an additional $5.8 billion in student loan debt relief. That move targeted roughly 78,000 public service workers, including those in healthcare.

According to the administration, the new debt cancellations bring the total number of affected Americans to 4.76 million people.

"Each of those borrowers has received an average of over $35,000 in debt cancellation," the White House said on its website.

Other affected public service workers include teachers, first responders and law enforcement officials.

WHAT'S THE IMPACT?

The action follows similar moves meant to benefit students and borrowers, including large increases to the maximum Pell Grant, tweaking Income-Driven Repayment and pressing colleges on their high tuition.

In the previous notice issued in May, the administration said public service workers never got the relief they were entitled to under the law "because of past administrative failures."

The debt relief includes borrowers who have benefited from the administration's limited Public Service Loan Forgiveness waiver, as well as regulatory improvements made to the program.

"The Public Service Loan Forgiveness Program is an important way to bring more Americans into public service and help them get out from under the burden of student loan debt," reads an email from the White House to borrowers. "But for too long, the program failed to live up to its commitments – and public service workers like you never got the relief you are entitled to under the law because of errors and administrative failures. I vowed to fix that, and I'm proud that my administration has delivered on that promise."

THE LARGER TREND

Beyond the relief under PSLF, the Biden-Harris administration has also approved $45.6 billion for 930,500 borrowers through improvements to income-driven repayment plans, $22.5 billion for more than 1.3 million borrowers who saw their institutions close or are covered by related court settlements, $11.7 billion for almost 513,000 borrowers with a total and permanent disability, and $1.7 billion for 29,700 borrowers through administrative adjustments to IDR payment counts.

The move comes during a presidential election year when the Biden administration has repeatedly compared its efforts in healthcare, such as efforts to strengthen the Affordable Care Act, to that of Republican nominee Donald Trump.
 

Jeff Lagasse is editor of Healthcare Finance News.
Email: jlagasse@himss.org
Healthcare Finance News is a HIMSS Media publication.