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 the 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’re one of the many borrowers who will still have student debt, consider your repayment options, such as refinancing your student loan. Visit Credible to compare free student loan refinancing offers from several private lenders without affecting your credit score.
BIDEN ADMINISTRATION PROBLEMS “FINAL EXTENSION” OF STUDENT LOAN DEFERRED
Who Qualified For A Student Loan Remission Under Biden?
The Department of Education provided more than $ 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 Release (TPD) program provides student debt relief to borrowers with total and permanent disabilities.
Eligible borrowers no longer have to repay their federal student debt, including Direct Loan Program loans, Federal Family Education Loan 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 Department of Education announced in August 2021 that these borrowers would automatically be eligible 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 had not reported income information under this program.
If you have a total and permanent disability but do not qualify for a PDT discharge, you may be able to apply for 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 view the estimated student loan rates from 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 Closed Schools Release Program. .
The Ministry of Education announced in June 2021 that 18,000 borrowers attending the now defunct ITT Technical Institute would have $ 500 million in canceled student loans under the 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 shutdown. 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 grants, but they are a viable borrowing option for some student loan borrowers who have adhered to federal loan limits. You can find out more about these loans and compare the estimated interest rates for free on Credible.
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 closed school discharge were also eligible for a student loan forgiveness under the Borrower Against Repayment Defense program.
The Department of Education approved 1,800 additional borrower defense requests in July 2021 for students at Westwood College, Marinello Schools of Beauty and the Court Reporting Institute. That resulted in about $ 55.6 million in relief, bringing the total borrower defense loan cancellations under the Biden administration to over $ 1.5 billion for 92,000 borrowers.
The department is currently reviewing the development of future borrower defense rules, holding public hearings for comment in June 2021. You can request borrower defense on the FSA’s 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 have been rejected since the program began. The Biden administration has opened a public inquiry into the PSLF, where borrowers called the program “broken” and “confusing.”
After conducting a review of the PSLF, the Ministry of Education announced a major overhaul of the program in October 2021. This limited exemption makes it easier for civil servants such as nurses and special education teachers to qualify for the program. provided they move their federal loans. into a direct consolidation loan by October 31, 2022.
The policy enabled 22,000 borrowers to immediately become eligible for a loan forgiveness valued at $ 1.74 billion. 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 have already been refused the PSLF can have their file examined.
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 refinancing your federal loans into a private student loan would make you ineligible for PSLF in the future. You can learn more about student loan refinancing by contacting a knowledgeable loan officer at Credible.
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