After overhauling the student loan forgiveness program, the Biden administration discharged $5 billion in federal student debts by 2021. It made it simpler for government employees to get rid of their student loan debt.
In a news statement issued on January 20th, the Department of Education said that more than 70,000 borrowers had qualified for loan forgiveness under the Public Service Loan Forgiveness program (PSLF) since President Joe Biden entered office.
This limited PSLF waiver, which was put in place briefly during the coronavirus epidemic, also assisted in bringing hundreds of thousands of debtors closer to achieving the conditions for debt reduction assistance.
According to the Education Department, over 98 percent of PSLF applications were denied before the revamp, and just 16,000 borrowers have ever achieved a debt cancellation throughout the program’s 30-year existence.
To discover more about the PSLF program and determine whether you are qualified for federal student loan cancellation, continue reading this article!
If you do not qualify for federal student debt forgiveness, you might consider alternate student loan repayment alternatives such as refinancing. You may compare student loan refinancing rates on Credible for free, and your credit score will not be affected in the process.
70K borrowers obtain student loan relief via restricted PSLF waiver
The Public Service Loan Forgiveness program enables public employees who have made on-time payments on their federal student loans for ten years to have the outstanding amount of their loans forgiven.
Also read: Student-loan borrowers with higher debt burdens are more possible to get forgiveness
In October 2021, the Biden administration revised the program to give debtors credit for prior payments that had previously been ignored. Consequently, 70,000 borrowers received student loan discharges of $5 billion, representing a savings of $5 billion.
Borrowers must fulfill the following eligibility standards to be eligible for the PSLF:
- Work full-time for a nonprofit organization or a government agency at the federal, state, municipal, or tribal level.
- You may choose to consolidate federal Direct Loans or other federal loans into a Direct Consolidation Loan.
- Make 120 eligible payments throughout a repayment plan based on your income.
Biden Administration Has Canceled $1.5B In Student Loans By Borrower Defense.
Select teachers, nurses, government officials, military service members, attorneys, and law enforcement officers can participate in this federal student loan repayment program if they work for a federal agency or nonprofit organization.
If you feel you meet the requirements, you will be required to provide extensive information about your job history via employer certification to be considered.
You may check to determine whether you are qualified for this program by visiting the Federal Student Aid (FSA) website and utilizing the PSLF Help Tool.
Student loan borrowers who do not qualify for PSLF may want to examine other student debt repayment alternatives, such as refinancing their student loans. Learn more about student loan refinancing by contacting a Credible loan specialist who is well-versed in the subject.
Alternative student loan repayment programs if you don’t authorize forgiveness
According to the Federal Reserve, although many student borrowers have qualified for loan forgiveness programs during the Biden administration, millions more continue to owe a total of $1.75 trillion in student loan debt, according to the Federal Reserve.
Furthermore, debtors who have private student loans are not eligible for government debt reduction programs. If you are not eligible for student loan forgiveness, you might choose one of the debt reduction options listed below:
Plans for debt repayment that are based on your income (IDR).
Student loan debtors who have taken out federal student loans may enroll in an IDR plan, limiting their monthly student loan payments to 10-20 percent of their discretionary income.
Employer-sponsored student debt repayment is available.
A student loan repayment matching scheme, similar to a 401(k) matching program, is offered by certain employers.
Refinancing of student loans.
It is possible that refinancing to a private loan with a lower interest rate can help you cut your monthly payments, pay off debt more quickly, and save money throughout the loan.
Can An Income-Contingent Repayment (ICR) Program Help Get My Student Loans Forgiven?
Please remember that converting federal student loans into private ones may exclude you from receiving government benefits, including IDR plans and special student debt forgiveness programs such as the PSLF.
However, if you do not intend to take advantage of these advantages, it may be smart to refinance for better terms now while interest rates are at historic lows.
Recent research by Credible shows that well-qualified students who refinance to a shorter-term student loan might save approximately $17,000 on their total debt obligation. Those that refinanced to a longer-term loan, on the other hand, saw their monthly payments drop by an average of more than $250 per month.
You may use a student loan refinancing calculator to assess whether this debt repayment option is the best option for your situation. Otherwise, visit Credible to begin the student loan refinancing process by comparing offers from several private lenders in one convenient location.