How to qualify for $17 billion in student loan forgiveness.
Here’s what you need to know – and what it means for your student loans.
President Joe Biden is considering a large-scale cancellation of student loans, but there could be restrictions on who is eligible for student loan relief, how much student loans are forgiven, and whether the president has the legal authority to cancel student loans. The good news is that you don’t have to wait for full student loan relief. Biden has forfeited more than $17 billion in student loans since taking office. These programs are still active and are now available for you to get student loan relief. Plus, it’s especially helpful if you want a fresh start with your student loans. Here are 4 ways to forgive $17 billion in student loans.
1. Student loan forgiveness through government loan forgiveness
Biden has canceled $6.8 billion in student loans for 113,000 student borrowers under the Public Service Loan Forgiveness program. Congress created this program in 2007 to help student loan borrowers obtain full federal student loan forgiveness. To qualify:
- work full-time for a qualified public service or non-profit employer
- Enroll in an income-based repayment plan and make most of your federal student loan payments while enrolled in the plan. and
- Make 120 monthly student loan payments.
You should also complete an Employment Verification Form annually and whenever you change jobs.
2. Termination of Student Loans in the Event of Total and Permanent Disability
Biden has canceled $7.8 billion for more than 400,000 student loan borrowers who have complete and permanent disabilities. There are three ways to qualify for a full and permanent disability release to qualify for student loan forgiveness:
- Veterans: You have a work-related disability that is 100% incapacitated, or you are disabled based on an individual disability assessment.
- Social security disability: You will receive Social Security Disability Insurance (SSDI) or Supplemental Insurance Income (SSI) benefits.
- Medical certificate: A doctor can certify that you cannot engage in “substantial gainful employment” due to a medically identifiable physical or mental impairment.
Submit an application and all supporting evidence of your total and permanent disability.
3. Facilitate student loan by defending the borrower until repayment
Biden canceled $2.1 billion on 132,000 student loan borrowers through borrower defense pending repayment. This federal program will help you get student loan forgiveness if:
- Your college or university closes during your enrollment or shortly after your de-enrollment, or
- if your college or university misled you.
By defending the borrower until repayment, you can get partial or full student loan forgiveness. You can file for student loan repayment borrower defense online.
4. Get your student loans canceled with earnings-related repayment
Income-based repayment plans like IBR, PAYE, REPAYE, and ICR are especially helpful for student loan borrowers who are struggling financially. (Student Loan Forgiveness: 5 Key Takeaways from the Big Announcement). An income-based payback can lower your student loan payment and cancel your federal student loans. Contact your student loan administrator to enroll. Here’s a snapshot:
- Your monthly federal student loan payment is based on your discretionary income and family size;
- It is possible to pay as little as $0 per month in government student loans.
- After 20 years (student student loans) or 25 years (graduate student loans) of student loan payments, you can have your remaining student loan balance automatically reversed.
Student loans: next steps
Foreclosure on a student loan may seem inaccessible, but there are many ways to obtain a student loan forgiveness. This is especially relevant if Biden doesn’t cancel all student loans or even most student loan debt. Importantly, the temporary student loan exemption due to the Covid-19 pandemic is expected to end on August 31, 2022. Review all of your student loan repayment options now before student loan payments resume. Here are great ways to pay off student loans faster and save money: