The Biden administration canceled $66 billion in student debt

by The Insights

Rocka | E+ | Getty Images

Although the Biden administration’s sweeping student loan forgiveness plan and the legal issues surrounding it have grabbed headlines, the US Department of Education has already written off more than $66 billion in student loan debt. education within existing programs.

More than 2 million borrowers, including defrauded students and those working in the public sector, have benefited from this relief in recent years.

“I feel like this administration has done more for borrowers in a short time than any other, especially for the most vulnerable borrowers such as people with disabilities and victims of fraud,” said Betsy Mayotte, President of the Institute of Student Loan Counselors, a non-profit association.

Still, advocates worry about the administration’s plan to soon resume federal student loan repayments, suspended since March 2020, without deeper debt cancellation. Even before the Covid-19 pandemic, 1 in 4 student borrowers defaulted.

Here’s a breakdown of debt relief already granted – and how to find out if you qualify.

$42 billion in canceled debt for civil servants

The Public Service Loan Forgiveness Program allows certain nonprofit and government employees to have their federal student loans forgiven after 10 years or 120 payments.

A number of recent changes to the policy have increased the number of borrowers whose debt has been canceled under it. These changes include simplifying and expanding eligibility criteria.

As a result, the Department of Education announced this month that it had approved $42 billion in loan forgiveness under the PSLF program for more than 615,000 borrowers since October 2021.

The best way to find out if your job qualifies for public service is to complete the so-called employer certification form. Try to complete this form at least once a year, said higher education expert Mark Kantrowitz. Borrowers must also keep records of their confirmed eligible payments, he said.

The pause on federal student loan repayments, which has been in effect for more than three years now, has proven to be a huge benefit for borrowers pursuing the PSLF, Kantrowitz pointed out. Every month during the break counts towards a borrower’s 120 required payments.

Fraudulent borrowers got $13 billion in aid

The Biden administration has focused on canceling student debt for borrowers who say their colleges misled them. Over the past few years, about 1 million people have had their debt relieved through the so-called Borrower Defense Loan release, for a total relief of $13.3 billion.

Generally, a borrower may qualify for debt forgiveness under the provision if their college has been at fault, such as providing false or misleading information about its program or placement rates, Kantrowitz said.

I feel like this administration has done more for borrowers in a short time than any other.

Betsy Mayotte

President of the Institute of Student Loan Counselors

The Harvard University Predatory Lending Project has a list of some of the institutions that were part of a student loan forgiveness settlement. If you attended one of these colleges and applied for a borrower defense loan discharge by June 22, 2022, you should be eligible for automatic relief, Kantrowitz said, even if your application has already been refused. Eligible borrowers will likely obtain cancellation no later than January 28, 2024.

Meanwhile, an additional 100,000 borrowers have had their debt forgiven because their colleges closed while they enrolled or soon after.

$9 billion for borrowers with disabilities

About 425,000 federal student borrowers had their debt forgiven under President Joe Biden through the Total and Permanent Disability Discharge, for a total of $9.1 billion in debt erased, according to a calculation from department data. of education by Kantrowitz.

The relief provision is for borrowers with a physical or mental disability that makes their job difficult or impossible.

The US Department of Education in Washington, DC

Caroline Brehmann | CQ-Roll Call, Inc. | Getty Images

More borrowers with disabilities have seen relief in recent years, after the Department of Education began using data from the Social Security Administration and the U.S. Department of Veterans Affairs to identify eligible individuals and grant them automatically cancel, Kantrowitz said. This data matching process is usually done once a quarter, he said, and eligible borrowers must be notified by the Education Department and their loan officer.

The Ministry of Education also decided to scrap the programme’s three-year monitoring period, during which borrowers had to continue to meet a number of requirements after obtaining the relief, including earning less than a certain amount. This procedure resulted in more than half of all approved borrowers having their loans reinstated, Mayotte said.

Even if a borrower is not considered disabled by another government agency, a doctor or nurse practitioner may also be able to argue that they are eligible for discharge. Those who think they are eligible can apply online or by mail.

400 billion dollars of forgiveness still at stake

Of course, beyond these tailored aid packages, millions of Americans are waiting for the Supreme Court to rule on President Joe Biden’s sweeping plan to forgive up to $20,000 in student debt per borrower.

The plan could wipe out up to $400 billion in debt.

If the Biden administration is able to follow through on its plan, Kantrowitz said, “you can’t have your loans canceled twice.”

If you have already received debt forgiveness under one of the above programs and have no remaining debt, he said, the president’s plan will not affect you.

If you still have student loans, you might qualify for a large $10,000 or $20,000 forgiveness, he said.

Kantrowitz said borrowers with questions about their eligibility for loan forgiveness should contact their service agent or the education department at 1-800-433-3243.

Meanwhile, there are dozens of other forgiveness options currently available at the state and federal levels for those with federal student loans.

You may also like

Leave a Comment

About Us

The Insights is a top leading multimedia news magazine curating a variety of topics and providing the latest news and insights.

Editors' Picks


Subscribe my Newsletter for new blog posts, tips & new photos. Let's stay updated!

@2021 – All Right Reserved. Designed and Developed by our team