The Biden-Harris administration announced the approval of an additional $4.5 billion in student debt relief last week, expanding relief to 60,000 public service workers across the United States, including over 22,000 in Massachusetts.
This relief comes alongside changes to the Public Service Loan Forgiveness program, which was created in 2007 to recognize the role of public service in the U.S. and help public service workers receive student loan relief, according to a White House press release.
Before the Biden-Harris administration, only 7,000 people received forgiveness through PSLF due in part to administrative errors and difficult processes, according to the press release. The rejection rate was as high as 98% in some years.
“Public service loan forgiveness was a promise made to people who decided to commit their careers to the community,” said Kristin McGuire, executive director of Young Invincibles, an organization that helps educate youth about their financial options and civic engagement. “That promise was made in 2007, and it has been very difficult to realize the other end of that promise since then.”
The Biden-Harris administration addressed program issues by simplifying the application process and implementing new regulations, which expands relief to more than 1 million public service workers.
“People are excited, they are elated, they are looking at the next steps of their lives,” McGuire said.
Dan Xie, political director of Student Public Interest Research Groups, said they are now seeing the program paying off in the way it was originally intended, with thousands of Americans “having their hard work rewarded.”
The expansion of debt relief also addresses concerns over the future of the public service workforce.
McGuire said prospective public service workers may start again to “see the value in dedicating your career to the community” without the fear of owing thousands of dollars in debt.
“Current students now can also see a light at the end of the tunnel,” McGuire said. “It allows them to be able to think, ‘Maybe a career in public service is actually worth it.’”
Ashley Wilson, a graduate physical therapy student at Boston University, said she knows “the burden of debt is immense” in public service professions, so relieving student debt will help create “less of a barrier to access” those jobs.
Xie said young people should be encouraged to take on careers in public service and “serve our communities.”
BU junior Camden Krause, who is majoring in finance at the Questrom School of Business, said she thinks creating a more “user-friendly” application process for student debt relief is an important improvement to expand access to students.
“The fact that sometimes people couldn’t go to a school they got into and wanted to, or couldn’t continue to go to school because they couldn’t figure out the platform or qualify, because of small technicalities seems really messed up honestly,” Krause said.
Part of the improvements the Biden-Harris administration made to PSLF included broadening qualification criteria.
PSLF now examines 17 factors in applicants and focuses less on specific thresholds for household income or debt-to-income ratios. It considers other components, including whether applicants attended institutions that have not demonstrated successful student outcomes and how long they’ve had loans.
There’s also been expansion in qualifying employment with relief being approved for those working full-time for a nonprofit or government organization.
McGuire said this expansion is a “massive win for the individuals of Massachusetts.”
Massachusetts ranks 14th among states in funding approvals, with borrowers receiving over $1.5 billion in loan relief.
Jerry Whitmore, assistant professor of higher education administration at BU, said this data may be misleading, considering Massachusetts employment data and the required payments borrowers must make to access relief.
One out of every six jobs in Massachusetts is located in Boston, which is also known to have the highest average annual salary in the country, according to Boston.com.
The PSLF program supports public servants by forgiving the remaining student loan balance of individuals who make 120 qualifying monthly payments.
“It tells a story that maybe we can make the payments … or it’s saying that we’re missing people,” said Whitmore, who is also lead researcher of FAIR Student Loans project, which works to increase accessibility and inclusivity in student loan forgiveness.
Whitmore said he hasn’t “dived deeper” to see whether the expansion of PSLF criteria may or may not include Boston employees, but the state’s high amount of loan relief funding may be due to higher paid workers being included in the program. Whitmore said these workers can make the 120 payments and have their remaining debt relieved more easily.
While the additional funding is cause for celebration for certain groups, McGuire criticized the time it took for relief to be granted.
“When the American government makes promises to its people, they should keep their promises,” McGuire said.
Anthony Abraham Jack, inaugural faculty director of BU’s Newbury Center and associate professor of higher education leadership, wrote in an email to The Daily Free Press that student debt forgiveness is doing “a great social service.”
“[Student loan forgiveness] is lifting individuals and families out of debt and allowing them to pursue markers of adulthood they had written off for themselves,” Jack wrote.
However, Jack wrote that loan forgiveness does not address the “underlying issue” of rising higher education costs.
Xie said there needs to be more awareness of the program and who is eligible. He said it’s important for current service workers and prospective public servants to know they can still benefit from PSLF.
“The major barrier right now is just to make sure that more people know that it exists,” Xie said.
