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US government cancels $42B in public service workers' student loans under revamped program

By Isabel Thakur
Published in Financial Planning
May 09, 2023
1 min read
US government cancels $42B in public service workers' student loans under revamped program

The US government has just cancelled over $42 billion in student loans of public service workers under a revamped program. This move is set to benefit around 550,000 people who work in government, non-profit institutions, and other public agencies. The new program, which was introduced by the Biden administration, replaces the previous Public Service Loan Forgiveness (PSLF) program, which had a high rejection rate. The previous program, which started in 2007, was meant to forgive loans for government and non-profit employees after 10 years of service. But over 90% of applicants were denied due to confusing eligibility requirements. The new program, called the Temporary Expanded Public Service Loan Forgiveness (TE-PSLF) program, is expected to reduce the number of rejections. This development comes amid growing calls for student loan forgiveness, particularly during the pandemic, when many people are struggling to make payments. Moreover, this decision also helps the government to address the growing student debt crisis faced by millions of Americans. Overall, the revamped program represents a significant step forward in the fight to help people repay their student loans and to reward public service workers who are essential to the functioning of society.

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