The notice from the federal government took Lee Dossett, a doctor in Lexington, Kentucky, by surprise. “Congratulations!” it began.
After a couple of years of denials for a student loan forgiveness program designed for public servants, Dossett, who has worked in the nonprofit sector for 10 years, was told last week that not only was his application re-evaluated, but that the Department of Education had determined he should have his outstanding medical school loans erased altogether — about $75,000 worth.
“I was completely shocked because I had honestly given up on getting it,” Dossett said.
But a record number of student borrowers are reaping the same benefit after the Biden administration in October began relaxing stringent rules around Public Service Loan Forgiveness, which launched in 2007 to help teachers, health care workers, military members and other public servants earn debt relief on their federal loans. As of last week, more than 70,000 borrowers qualified for debt forgiveness, amounting to about $5 billion in relief, the Department of Education said.
Before the overhaul, just 16,000 borrowers of about 1.3 million enrolled applicants had their loans’ remaining balances expunged through the program, according to federal data.
Cody Hounanian, the executive director of the Student Debt Crisis Center, a nonprofit organization that advocates for student borrowers, said the sudden notices of discharged debts are a blessing for many applicants who dutifully made the required 120 monthly payments or were on course to and yet were denied because they were inadvertently enrolled in the wrong payment plan or had the wrong type of loan or due to another technicality.