Student loan forgiveness has been a highlight in the news lately, and with the looming end of the student loan forbearance coming up in just a few months (September 30th, 2021) there’s no wonder why. America holds over $1.7 trillion in student debt. President Biden has expressed support of $10,000 forgiveness per person, though Democrats are pushing for a higher $50,000 forgiveness.
It seems that President Biden has swayed in his opinion on forgiveness, as on April 1st he asked Education Secretary Miguel Cardona whether it was within the president’s power to cancel $50k in student loan debt. The Department of Education has not yet released its findings. Until the findings are released, we likely won’t see any major moves made. Biden might be able to sign an executive order to cancel some student loan debt per person, or Congress may have to pass a bill if cancellation is outside of Biden’s purview.
As it stands, there are currently a few forgiveness options for those who qualify.
- If you have a disability, you may qualify for forgiveness and discharge of your student loans.
- The Public Service Loan Forgiveness is a program that forgives federal direct student loans for borrowers that hold a government or non-profit job, after 120 qualifying on-time payments in an income-driven repayment plan. In recent years there has been some significant issues with this forgiveness program. Since 2007, when the program began, nearly 99% of applicants have not been approved. In 2020 it was found that the Office of Federal Student Aid had been mischaracterizing employers, causing qualified applicants to be labeled as ineligible.
- Borrowers on an income-driven repayment plan, where the monthly payments are no more than 10% of the borrower’s discretionary income, can have their loan balance forgiven after 20 years for undergrads or 25 years for grad students.
The Wrap Up
Though we won’t know for sure whether student loan forgiveness is on the table yet, there is reason to be hopeful. Over 1 million Americans have signed petitions for forgiveness, and with mounting pressure from the democratic party to pursue student debt, we may see some relief sooner rather than later.
For more information you can visit www.studentaid.gov