Is Your Student Loan a Part of the Forgiven Billions

A lot of people thought that most or all student loans would be forgiven once President Biden began his term. That is not necessarily happening on a wide scale, but there are student loans up to billions that are forgiven and canceled. Many Americans do not realize that this forgiveness could potentially benefit them. This article will detail what this forgiveness is and which students will be able to see this cancellation!

Forgiven Student Loans: How Did That Happen?

The Department of Education (ED) forgave student loans in three different ways. Only people with loans that fall within eligible situations can be forgiven. This includes the following:

  • Public Service Loan Forgiveness (PSLF)
  • Permanent Disability
  • Defense Claims

The Public Service Loan Forgiveness (PSLF) Program

The Department of Education (ED) announced in October 2021 that major changes would take place with the Public Service Loan Forgiveness (PSLF) program. Due to those changes, the ED instantly qualified 22,000 borrowers to cancel their student debt. The ED anticipates that the changes in the PSLF program will eventually let more than 550,000 borrowers with consolidated debts qualify for loan forgiveness.

The PSLF program is a great option that can help out a lot of students. This program eliminates the remaining amount of student loans as long as the borrower has made 120 monthly payments (the payments must be qualifying). Additionally, only those that are employed at a local, state, or federal government agency can be eligible for this program. These professions include:

  • Teachers
  • Firefighters and Nurses
  • People that are a part of the military
  • Other people that work in the public sector

During President Biden’s term so far, this program has forgiven billions of student loans for about 127,000 borrowers. Furthermore, borrowers are able to waive on-time, full-amount payment requirements. To receive support, borrowers will need to submit a PSLF application, which is due by Dec. 31st, 2023.

Want to Know More?

The PSLF tool can help you learn more about the program. Borrowers can determine whether or not they are employed at a qualifying employer to benefit from either PSLF or Temporary Expanded Public Service Loan Forgiveness (TEPSLF) programs with this PSLF tool.

Furthermore, this tool offers information on steps borrowers can take to be eligible, managing the submission process, and so on.

Permanent Disability

The ED announced another change in regulations in August 2021. This change allowed 323 million students that have eligible disabilities the chance for their student loans to be forgiven. The best part is that qualifying borrowers will not be required to apply to receive benefits! Rather, if their information matches with what the Social Security Administration (SSA) has, they will qualify. The process for determining eligibility takes place every quarter, and started back in September 2021.

Defense Claims Against Specific Educational Institutions

Some schools mislead and defraud students on their student loans. This happened when they claimed these students had the right to file for “borrower defense claims” with the ED. If these schools broke state laws, then students can be eligible for full or partial student loan forgiveness. Some student loan cancellations include:

  • Corinthian Colleges: On June 1st, the ED declared that $5.8 billion in student loan cancellations would take place for 560,000 students.
  • DeVry University: 16,000 students got $415 million in student loan forgiveness. There were more cancellations for other eligible borrowers too!
  • ITT Technical Institute: $1.1 billion in loan forgiveness was provided to 115,000 students in August 2021.
  • Marinello Schools of Beauty: 28,000 borrowers had their loans worth $238 million forgiven in April.

If you went to any of these schools and you had a student loan, then you should file an official borrower defense claim to receive assistance. You have the ability to submit a claim through the Federal Student Aid website, where it will take about 30 minutes to fill out your application. Once you submit your application, the ED contacts you by email to offer information and details about the forgiveness of your loan.

If Your Student Debt is not Eligible for Forgiveness, Then What Happens?

If you are unlucky enough that your student loan does not qualify, there is still a light at the end of the tunnel. There are ways to manage your student loans much easier, which include:

  • Think about Going For an Income-Driven Repayment Plan
  • Ask about the possibility of deference or forbearance

Think about Going For an Income-Driven Repayment Plan

Students with federal student loans could be eligible for income-driven repayment plans. The ED provides these plans and there are four different kinds of them to look through. These repayment plans can allow students to benefit greatly.

These plans allow borrowers the opportunity to decrease their payments per month from 10% to 20% of their discretionary income. The discretionary income depends on their family’s income, the poverty guidelines, and so on. Other than decreasing the payments they make per month, these plans also lengthen the repayment term to 20 or 25 years. Once this term is complete, the ED cancels the remaining amount of the loan.

Ask About the Possibility of a Deference or Forbearance

Whether you have a federal or private student loan, you can gain a lot from asking about options for deference or forbearance. These opportunities can help those who are financially struggling. The options will temporarily stop monthly payments for the student loan for a specific timeframe. On the other hand, you should know that the interest will still build on your student loans during the temporary period of time that you do not make monthly payments.

The Final Verdict

Unfortunately, not all students can benefit from student loan forgiveness. The only student loans that can be forgiven for borrowers are:

  • Public Service Loan Forgiveness (PSLF)
  • Permanent Disability
  • Defense Claims

In the case that your loan does not qualify for forgiveness, there are other options available to help you deal with your student loans. Consider the following options:

  • Think about Going For an Income-Driven Repayment Plan
  • Ask about the possibility of deference or forbearance

For more support, you can always contact your school’s financial aid office. They can give you more information to get you on the right track!