No 4th stimulus check, but this updated program will cancel student loans
A group of members of Congress sent President Biden a letter earlier this week urging him to accelerate a new financial benefit for millions of Americans. One that would far exceed what the government has done so far in the area of stimulus checks. Their demand: That the federal government immediately cancel up to $50,000 in debt-related student loans per borrower.
“For generations,” members of Congress wrote to Biden in the letter dated Jan. 25, “young people have been encouraged to pursue higher education as a tool for economic and social mobility. However, the lingering burden of student debt has prevented many borrowers from truly transforming their lives and our country.
Public service debt forgiveness
So far, Biden has not acquiesced to those demands from more progressive members of Congress who want him to unilaterally write off large chunks of student loan debt. But that’s not the same as saying that a significant and ever-growing portion of student loan debt was not forgiven under the Biden administration. Because it is.
The administration began by expanding existing student loan forgiveness programs. Since January 2021, the federal Department of Education has forgiven some $15 billion in student loan debt for 675,000 borrowers.
Instead of writing off debt outright with the stroke of a pen, as progressives have been asking Biden to do, one way to do that is to overhaul a federal initiative that was barely working. This is the Public Service Forgiveness Loan Program.
This effort was launched in 2007. And it was supposed to inspire people to choose jobs in the public sector. After a decade in these jobs – as teachers and cops, for example – and making payments? The program would cancel their university debt. It didn’t work out that way, however. At least not at first, with little participation in the program.
Biden, meanwhile, took office and in the fall his administration relaxed the rules and standards of the program a bit. The result? Data his administration shared a few days ago shows nearly $5 billion in student loan relief has been granted. To approximately 70,000 borrowers.
Until October, Department of Education Under-Secretary James Kvaal said USA today, the civil service loan forgiveness program had failed to deliver on its promises. “Teachers, nurses, first responders, service members and so many public service workers have supported us, especially amid the challenges of the pandemic,” Kvaal told the newspaper. “A year later, the Biden administration continues to demonstrate that we have our backs, too.”
Democrats, of course, currently control both houses of Congress. However, the administration has been unable to muster enough support to continue sending more stimulus checks. The last monthly Child Tax Credit check went out in December. Because of that? Attention is now increasingly turning to alternative methods by which the government can provide financial assistance to Americans. And student loan relief, as we’ve seen, is a tempting target for many Democrats.