Here are the Biden administration’s current policies related to student loan forgiveness:
- $1.3 billion worth of student debt has been forgiven for those permanently disabled and unable to work
- $1 billion of debt forgiveness for students that had been defrauded by schools
- Pause on federal payments and collections until September 31, 2021
- Zero-interest on outstanding federal loans until September 31, 2021
- Eliminated the need to report student loan forgiveness as income through 2026
No decision has been made on how to address the record $1.7 trillion of debt for the remaining 45 million people that owe money on their federal student loans. This leaves many wondering if the Biden administration will forgive student loans or whether it plans some other form of debt relief.
$1.3 billion in student loan debt forgiveness.
The Biden administration has announced plans to provide additional student debt relief for those in default. This would impact roughly 41,000 people and involve the forgiveness of more than $1.3 billion in loans.
The announcement made big headlines, but students worried about their loans shouldn’t be celebrating just yet.
These loans had already been forgiven once, for people that are totally and permanently disabled. Those affected were required to demonstrate their income remained below the government-set minimums. Nearly a quarter-million people — 94% of the eligible — failed to turn in the paperwork necessary to make it permanent.
This plan at once reinstates the loan forgiveness program for those disabled and in default and makes it retroactive to March 2020. It also eliminates the proof-of-income requirement.
$1 billion in student loan debt forgiveness.
This move came shortly after the Biden administration canceled $1 billion in student debt for borrowers claiming their schools had intentionally deceived or defrauded them. It impacted some 73,000 borrowers.
