Student loan relief is coming to another 74,000 Americans, with President Biden on Friday announcing an additional $5 billion in debt forgiveness for borrowers including teachers, nurses and firefighters.
The announcement marks the latest round of debt cancellations since the Supreme Court last summer blocked Mr. Biden's student loan forgiveness program, and brings to $136.6 billion forgiven for more than 3.7 million Americans.
The discharges are the result of fixes made by the administration to income-driven repayment (IDR) forgiveness and Public Service Loan Forgiveness (PSLF), with the Department of Education saying that payments are now being accounted for more accurately.
The Biden administration a week ago said that, starting in February, people with less than $12,000 in student loans and who have been making payments for at least 10 years would get their remaining loan balance erased. Borrowers also have to be enrolled in the White House's new Saving on a Valuable Education (SAVE) repayment plan.
Qualifications for Student Loan Forgiveness
Around 44,000 borrowers who are teachers, nurses, firefighters, social workers, and public servants with at least 10 years of service are eligible for the latest round of student loan forgiveness proposed by President Biden. Additionally, close to 30,000 borrowers who have been making payments on their loans for at least 20 years but did not receive relief through income-driven repayment plans are also included.
The relief plan announced on Friday can be categorized as follows:
- $1.7 billion will be allocated to 29,700 borrowers through administrative adjustments to IDR payment counts. This aims to bring borrowers closer to forgiveness and address concerns about the misuse of forbearance by loan services. The Department of Education reports that this brings the total IDR relief to $45.7 billion for 930,500 borrowers overall.
- $3.2 billion will be provided to 43,000 borrowers under the Public Service Loan Forgiveness (PSLF) program. The total relief through PSLF now amounts to $56.7 billion for 793,400 borrowers since late 2021.
The Need to Fix Income-Driven Repayment Plans
Under the Higher Education Act and Education Department regulations, borrowers become eligible for forgiveness after making either 240 or 300 monthly payments in an IDR plan or the standard repayment plan. The specific number of months depends on factors such as when the loans were taken out, the type of loans, and the enrolled IDR plan. However, faulty payment counts have prevented some borrowers from progressing towards loan forgiveness, as highlighted by the administration.
Number of Enrollees in SAVE
Approximately 6.9 million borrowers are enrolled in the new IDR plan, with around 3.9 million of them having monthly payments of $0, according to the administration.
Apply for Student Loan Debt Relief Now!
If you are struggling with student loan debt, there are resources available to help you. Visit studentaid.gov to find additional information and support. You can also sign up for the SAVE plan at StudentAid.gov/save to get relief from your student loan burden.
