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Biden administration promotes billions in student loan forgiveness

Avery Bleichfeld
Biden administration promotes billions in student loan forgiveness
U.S. Rep. Ayanna Pressley has been strong proponent of student debt relief. BANNER FILE PHOTO

The Biden administration has touted increased student debt loan forgiveness in recent months, but some advocates say that relief will only go so far.

Recent changes to federal plans have added to loan forgiveness totals that rise to over $140 billion.

Student debt relief is especially important in states like Massachusetts, where education is a major industry, said Vanessa Snow, president of the board of Zero Debt Massachusetts, a debt relief advocacy nonprofit.

She credited legislators like U.S. Rep. Ayanna Pressley and Sen. Elizabeth Warren, who have been strong proponents of student loan forgiveness.

“They really understand that in Massachusetts, being a very academic state, we have so many people who are strapped, holding off buying a house or continuing their education, starting a family,” Snow said. “It’s a lot of people in Massachusetts that this would benefit.”

In March, the Biden administration announced it would be forgiving approximately $5.8 billion in student loan debt for an additional 78,000 Americans through changes to its Public Service Loan Forgiveness program.

Under that program, employees of any level of government as well as 501(c)(3)s and some other nonprofit organizations can have their loans forgiven after 120 qualifying monthly payments.

In a press release following the announcement, Pressley lauded the changes.

“This relief will be life-changing for our public servants who have dedicated their lives to strengthening our communities but have been denied the debt cancellation they were entitled to for far too long,” she said.

The administration plans to change who manages operations of that program, which was first started in 2007, from an outside loan servicer to operating through the Department of Education’s StudentAid.gov website. The change will go into effect in May. During that time, the department will pause processing forms for the Public Service Loan Forgiveness program for a month.

That announcement came a month after the Biden administration approved another $1.2 billion in student debt cancelation through its Saving on a Valuable Education — or SAVE — plan in February.

$19.5 million of those cancellations went to about 2,500 Massachusetts borrowers.

The SAVE plan puts loan payments on a sliding scale based on student income. Borrowers who originally took out $12,000 or less and have been repaying their loans for at least a decade can have the remainder of their debt forgiven. Each additional $1,000 adds one year on before forgiveness.

Snow, a student borrower herself, said she’s enrolled in the SAVE plan as she works to pay off about $50,000 in debt. It’s brought her monthly payments down to a couple hundred dollars per month, which she said has been helpful but it’s still an extra expense she must account for.

Massachusetts legislators, like Pressley and Warren have been pushing for other support for borrowers as well.

In a mid-March letter to the Social Security Administration, U.S. Department of the Treasury and U.S. Department of Education, they, alongside four other legislators, came out against the Treasury Offset Program, which pulls money that the federal government is set to pay a citizen to balance debts — such as student loan debts — that they may owe.

In the letter, Pressley, Warren and the other legislators said the practice can be especially harmful to seniors and people with disabilities who rely on Social Security — one source of federal money the program can pull from.

They expressed concern that a growing number of older Americans have student loan debt as they approach retirement, and that pulling from Social Security money to offset that debt could push people toward or into poverty.

“We urge you to explore exempting Social Security retirement, survivor, and disability benefits from administrative offset due to student loan debt,” they wrote.