On Wednesday, the Biden administration declared that it will forgive an additional over $5 billion in student loan debt, which will impact borrowers who are eligible for the Public Service Loan Forgiveness and income-driven repayment forgiveness programs.
The Education Department announced the fresh cancellations, which are anticipated to assist about 80,300 borrowers and increase the total amount of student debt relief awarded to over 3.6 million students under the Biden administration to $132 billion.
Education Secretary Miguel Cardona stated in a statement, “Prior to President Biden taking office, it was virtually impossible for eligible borrowers to access the student debt relief they rightfully earned.” “The information made public today demonstrates once more how successful the Biden-Harris Administration’s unwavering efforts to improve the dysfunctional student loan system are—nearly $132 billion in loan forgiveness has been approved for over 3.6 million borrowers. There has never been debt reduction done this well, and we have no plans to stop.
Two distinct borrower categories were the targets of the funding. The first group was made up of qualified borrowers who are enrolled in the Public Service Loan Forgiveness program, which forgives qualifying public sector workers’ outstanding student loan debt in exchange for ten years of timely payments. The second group of borrowers didn’t receive credit for all of their student loan payments, but they did make at least 20 years’ worth of eligible payments under an income-driven repayment plan.
The billions in federal student loan relief come even after President Joe Biden’s student loan forgiveness program was halted by the Supreme Court in August. The program would have allowed qualifying low- and middle-income borrowers to have up to $20,000 in student loan debt canceled. It also follows the summertime introduction of the White House’s “SAVE” debt forgiveness program.
The president should have sent an email in November informing the borrowers who were impacted by Wednesday’s cancellations that the remaining balances on their loans would be canceled in the upcoming weeks.
In the email, Biden praised the fact that he and his team were able to provide borrowers with the relief they rightfully deserved. “I promise you that as long as I am President, I will never stop fighting for hardworking American families and will never stop working to make sure our democracy delivers for the American people.”
What are some ways the government can help you with your student loan debts?
The one-time debt relief proposal, often known as the forgiveness of up to $20,000 for Pell Grant borrowers, was halted by the Supreme Court. However, you might qualify for additional federal student loan programs that offer assistance with loan repayment, including complete loan forgiveness.
Look over the possibilities below; you never know what you might be qualified for.
Income-Driven Repayment (IDR) Forgiveness
Your monthly payment under an IDR plan is determined by your family size and income. Any leftover debt on your student loans will be erased if you repay them via an IDR plan after making a specific number of payments over a period of 20 or 25 years. Check out the Savings on a Valuable Education (SAVE) Plan, our newest IDR plan.
To compare programs, calculate monthly payments, and find out if you qualify for IDR loan forgiveness, use Loan Simulator.
Depending on which IDR plan you qualify for, your monthly payment amount and loan forgiveness period will vary. Additional benefits of forgiveness under the SAVE Plan will take effect in July 2024.
For this modification to take effect, borrowers who hold specific non-direct loans will need to take action before the end of 2023.
Public Service Loan Forgiveness
After you’ve made 120 qualifying payments, or ten years of payments, you may be eligible for forgiveness of the whole remaining balance of your direct loans if you work full-time for the government or a nonprofit organization. You must repay your federal student loans on an IDR plan in order to be eligible for PSLF benefits.
To apply for PSLF, use the PSLF Help Tool if you’re interested.
If you consolidate by the end of 2023 and have specific non-direct loans, you may be eligible for additional credit toward PSLF payments. For additional information, read about the IDR account modification.
School-related Related options
A legitimate justification for canceling federal direct loans is the borrower’s argument against repayment. If borrowers feel that their school deceived or lied to them about anything that was crucial to their decision to enroll and take out loans, they can file for borrower defense. Fill out an application for borrower defense if you believe your case qualifies.
Closed-school discharge is an additional type of discharge related to education. If you fulfill certain qualifications, you may be eligible for discharge of your federal student loan in the event that your school closes while you are still enrolled or shortly after you withdraw.
Teacher Loan Forgiveness
If you work as a full-time teacher for five consecutive full academic years in specific elementary or secondary schools or educational support agencies that assist low-income families, and if you meet additional requirements, you may be eligible for forgiveness of up to $17,500. Find out more about the forgiveness of teacher loans.
Keep in mind that you might not be eligible for benefits under the TLF and PSLF programs for the same duration of teaching service.
