Biden admin to forgive $1.2B in student loans: 3 things to know

The Biden administration announced a new round of student loan forgiveness totaling 1.2 billion dollars for 35 thousand borrowers. This round of forgiveness is through an overhaul of the 2007 Public Service Loan Forgiveness (PSLF) initiative, which applies to certain not-for-profit and government workers.

Yahoo Finance anchor Rachelle Akuffo breaks down three things to know about the announcement.

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This post was written by John Lesinski

Video Transcript

The Biden administration announcing a brand new round of student debt forgiveness that could cancel $1.2 billion in student debt.

That's part of the public service loan forgiveness programme.

Our own Rochelle is here with more for Hi, good to see you, Ali.

So let's start with the three things that you need to know who qualifies.

How do you apply and how is this different from other student loan?

Forgive forgiveness efforts.

So, first eligibility.

Now this applies to certain not for profit and government workers who can get their federal student loans cancelled after 10 years of on time payments.

That's 100 and 20 payments now.

The PSLF was signed into Law and Act Act back in 2007 under then President George W Bush.

But the rejection rate was notoriously high.

Anything from spelling errors to gathering physical signatures and EIN numbers from every previous employer to fill out some of these certifications.

Those were just some of the hurdles that really limited the acceptance rate.

But now you can apply online in a streamlined application with the required signatures, borrowers and employers digitally, and that's using the tools at student aid.gov/pslf now.

Lastly, how is this different?

Well, Education Secretary Miguel Cardona calls these improvements long overdue and gives public servants the financial breathing room they were promised.

Of course, you'll recall.

The Supreme Court struck down President Biden's attempt at the sweeping loan forgiveness legislation last summer, but now the administration is maximising some of these existing programmes to reach that effort.

In a statement, the Education Department says today's announcement brings the total loan forgiveness approved by the Biden Harris administration to 100 and $68.5 billion for 4.7 6 million Americans, which includes 69.2 billion for 946,000 million borrowers through PSLF.

Interesting that they do note that up until this point, only 7000 people were able to get payment through this because of all this red tape that they had to jump through all