The Biden administration has written off federal student debt through four major loan cancellation programs, including the PSLF and the Borrower Defense. (iStock)
Since President Joe Biden took office in January 2021, hundreds of thousands of Americans have seen their student loan debt wiped out – some of those borrowers have even seen their balances reduced to zero.
While a significant portion of the population has benefited from the cancellation of federal student loans, an estimated 43 million borrowers still owe a total of $ 1.73 trillion in university debt, according to Education Data Initiative. That’s an average balance of $ 39,351 per borrower.
Read on to find out who is eligible for their student loan cancellation. If you are one of the many borrowers who will still have student debt, consider your repayment options such as student loan refinancing. Visit Credible at compare student loan refinancing offers from several private lenders for free without affecting your credit score.
BIDEN ADMINISTRATION PROBLEMS “FINAL EXTENSION” OF STUDENT LOAN DEFERRED
Who Qualified For A Student Loan Remission Under Biden?
The Ministry of Education Provided over $ 11.5 billion in student loan relief to approximately 580,000 borrowers under the Biden administration through the following student loan cancellation programs:
Learn more about each program in the sections below.
CAN AN INCOME REPAYMENT PLAN (INC) HELP GET MY STUDENT LOANS FORGIVEN?
Exit from total and permanent disability
- Eligible borrowers: 364,000
- Total debt cancellation: $ 7.1 billion
The Total and Permanent Disability (TPD) exit program offers student debt relief for borrowers with total and permanent disability.
Eligible borrowers no longer have to repay their federal student debt, including Direct Loans Program loans, Federal Family Education Loans Program (FFEL) loans, and Federal Perkins loans. They are also not required to fulfill a TEACH Grant service obligation in order for their loans to be canceled.
Previously, borrowers had to apply for a TPD discharge, but the Ministry of Education announced in August 2021 that these borrowers would automatically qualify for relief through an existing data match with the Social Security Administration (SSA). This resulted in approximately $ 5.8 billion in automatic student loan repayments during this period.
The Biden administration also reinstated $ 1.3 billion in TPD landfills in March 2021 for 41,000 borrowers who did not report income information under this program.
If you have a total and permanent disability but are not eligible for TPD leave, you may be able to apply to the program on the Federal Student Aid (FSA) website by providing documentation from your doctor. And if you still don’t qualify for a TPD discharge, visit Credible to compare alternative student loan repayment programs like refinancing. You can browse estimated student loan rates of private lenders in the table below.
WHAT TO DO IF YOUR STUDENT LOAN DEPARTMENT CLOSES
School exit closed
- Eligible borrowers: 133,000
- Total debt cancellation: $ 1.6 billion
Student loan borrowers who attended a school that closed while enrolled or shortly after graduating may be eligible for the cancellation of their federal student loans under the school exit closed program.
The Ministry of Education announced in June 2021 that 18,000 borrowers who attended the now defunct ITT Technical Institute would have $ 500 million in canceled student loans under this program. Then in August 2021, the ministry provided an additional $ 1.1 billion in assistance to 115,000 borrowers who left ITT on or after March 21, 2008, without graduating.
The Biden administration made these changes after a review of the issues that led to ITT’s closure. The ministry found that the school had distorted the “true state of its financial health”, allegedly misleading students into taking out private student loans presented as grants.
“For years ITT hid its true financial situation from borrowers while influencing many of them to take out private loans on deceptive and unaffordable terms which may have caused borrowers to drop out of school,” the secretary said. American in Education, Miguel Cardona, in a statement.
Private student loans are not scholarships, but they are a viable borrowing option for some student loan borrowers who have completed the federal loan limits. You can learn more about these loans and compare the estimated interest rates on Credible for free.
REFINANCING YOUR STUDENT LOANS CAN SAVE YOU OVER $ 250 ON YOUR MONTHLY PAYMENTS
Defense of the borrower on repayment
- Eligible borrowers: 92,000
- Total debt cancellation: $ 1.5 billion
The loan repayment defense program is available for students who have been misled by a school involved in misconduct while enlisted. About 7,000 borrowers who received a school exit closed also eligible for a student loan forgiveness under the borrower’s repayment defense program.
Ministry of Education approved 1,800 additional borrower advocacy requests in July 2021 for students of Westwood College, Marinello Schools of Beauty and the Court Reporting Institute. This resulted in aid of approximately $ 55.6 million, which led to the total borrower defense loan cancellations under the Biden administration to more than $ 1.5 billion for 92,000 borrowers.
The department is currently reviewing the development of future rules for defending borrowers, holding public hearings to receive comments. in June 2021. You can ask for the borrower’s defense on the FSA website.
12 LENDERS TO CONSIDER FOR STUDENT LOAN CONSOLIDATION
Public service loan remission
- Eligible borrowers: 22,000
- Total debt cancellation: $ 1.74 billion
The Public service loan forgiveness program (PSLF) offers federal student loan relief as an incentive to borrowers who work in a government or nonprofit profession. Eligible borrowers can have the remainder of their federal loan debt discharged after making 120 consecutive qualifying payments.
But the PSLF program has been criticized for its extremely low approval rate – 98% of PSLF applications were rejected since the start of the program. The Biden administration opened a public inquiry into the PSLF, where borrowers called the program “broken” and “confusing”.
After reviewing the PSLF, the Education Department announced a major overhaul of the program in October 2021. This limited waiver makes it easier for public servants like nurses and special education teachers to qualify for the program, provided they transfer their federal loans to a direct consolidation loan by October 31, 2022.
The policy has enabled 22,000 borrowers become immediately eligible for $ 1.74 billion in loan cancellation. An additional 27,000 borrowers will need to verify their employment in order to qualify for student loan relief worth up to $ 2.82 billion.
LONGER ABSOLENCE ON STUDENT LOANS NEEDED, SELL 40% OF BORROWERS IN SURVEY
The ministry estimates that more than 550,000 borrowers be, on average, two years closer to a loan discharge under the PSLF thanks to these actions. In addition, borrowers who PSLF previously denied are eligible for a review.
To meet PSLF eligibility criteria, borrowers must work for an eligible employer in a nonprofit organization or in a federal, state, local, or tribal government setting. You can use the PSLF Help Tool to see if you are eligible. If you are not eligible for the PSLF, you may be able to pay off your student loan debt on better terms through refinancing.
Keep in mind that refinance your federal loans in a private student loan would make you ineligible for PSLF in the future. You can learn more about refinancing student loans by contacting a knowledgeable loan officer at Credible.
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