The Biden administration recently celebrated a significant milestone in student debt relief with the announcement of an approval of $74 billion in loan forgiveness under the Public Service Loan Forgiveness (PSLF) program. This news came during a challenging time for many borrowers, marking a positive development in a complicated student loan landscape. The PSLF program, which was designed to ease the burden of education debt for public service employees, has seen over a million borrowers receive loan discharges since President Biden took office—a stark contrast to its history before his administration, where only around 7,000 borrowers qualified for relief since its inception in 2007.
Initially established through bipartisan legislation signed by former President George W. Bush, the PSLF program aimed to encourage employment in public service sectors, offering borrowers forgiveness after making 120 qualifying payments. However, for years, PSLF was marred by a complex web of rules and poor servicing practices, leading to a staggering 98% denial rate for applicants. Many borrowers found themselves confused by the requirements and struggled to maintain their progress toward forgiveness. Recognizing its failings, the Biden administration made overhauling PSLF a priority, implementing several initiatives that have drastically improved the rates of approval for applicants.
Among these changes were the implementation of the Limited PSLF Waiver, which temporarily relaxed the rules for qualifying payments, and the IDR Account Adjustment that allowed even more borrowers to benefit from increased credit towards loan forgiveness. New regulations introduced last year further softened the qualifying conditions for payment and employment, culminating in a monumental movement from just a few thousand borrowers receiving forgiveness to more than a million in under three years. Despite these improvements, however, the PSLF program has encountered substantial challenges in recent months, particularly due to a servicing transition that complicated processing for many borrowers.
As part of a planned overhaul, PSLF servicing transitioned from MOHELA to StudentAid.gov, creating temporary disruptions that resulted in processing delays for many borrowers. With the transition now complete, the Education Department has resumed processing PSLF qualifying payments and is steadily clearing the backlog. Nonetheless, the turmoil in borrower processing has been augmented by legal challenges surrounding the SAVE income-driven repayment plan, which has left many borrowers in limbo, unable to count their months in repayment towards student loan forgiveness, particularly under PSLF.
Looking ahead, the PSLF program faces potentially significant challenges due to imminent national elections. While PSLF is a statutory program and cannot simply be eliminated by a new president, there are risks that a potential return of former President Trump to the White House could lead to rollbacks of recent improvements made by the Biden administration. Previous criticisms from Trump regarding Biden’s student loan policies raise concerns that if Republicans regain control, they may attempt to repeal PSLF altogether. Such efforts could align with Project 2025, a conservative initiative that explicitly calls for repealing the program if the GOP takes full control of Washington.
In contrast, Vice President Kamala Harris has been a staunch supporter of PSLF and other student loan forgiveness initiatives under the Biden presidency, suggesting that the program would be relatively secure should she step into a leadership role. The political future of PSLF is both uncertain and pivotal, especially for the millions of public service workers relying on the promise of forgiveness for their educational debts—a promise that, with the right leadership, could either flourish or face severe setbacks depending on the outcomes of the upcoming elections.
