President Joe Biden has now canceled $25 billion in student loans.
Here’s what you need to know – and what it means for your student loans.
Biden has now forgiven more student loan debt than any president in US history. While the President has focused on targeted student loan forgiveness, widespread student loan relief has eluded student loan borrowers. Last week, the White House said the president had not yet decided whether to forgive borrowers $10,000 in student debt. Biden could have announced a possible student loan cancellation plan last Saturday while delivering the inaugural address at the University of Delaware. However, the President did not refer to student loan forgiveness in his remarks. Now student-loan borrowers are wondering if the president will continue to use executive power to terminate student loans for most or all student-loan borrowers. Or will the president continue to focus on targeted student loan forgiveness?
Biden has forgiven $25 billion in student loan debt
Biden has canceled $25 billion in student loans for 1.3 million student loan borrowers. This contains:
- Borrower defense to repayment: $7.9 billion for 690,000 borrowers on borrower defense, student loan repayments and school closures.
- Public Service Loan Forgiveness: $7.3 billion for more than 127,000 student loan borrowers through government loan forgiveness.
- Permanent Disability: More than $8.5 billion for more than 400,000 borrowers with a total and permanent disability.
That student loan forgiveness includes $5.8 billion in student loan debt that Biden canceled this week. The Biden administration has also made significant changes to income-based repayment that will help more student-loan borrowers qualify for student-loan forgiveness.
Student loan borrowers are wondering when Biden will cancel student loans
Borrowers and student loan advocates are urging the President to decide whether to grant sweeping student loan forgiveness to millions of student loan borrowers. In late April, Biden said he would make a decision within weeks. However, that was almost five weeks ago — and Biden has not commented further on the next steps for student loan forgiveness. This has left student loan borrowers behind Student loans in limbo. The Biden administration has issued a $10,000 student loan waiver with potential income caps of $150,000 for individuals and $300,000 for married or joint applicants. Biden also said he was not considering forgiving $50,000 in student loans. The notion of income caps and limited student loan forgiveness has not resonated well with progressive congressmen and leading advocates. (It hasn’t gone down well with those folks either, who probably won’t qualify for student loan forgiveness). They argue that Biden should forgive more student debt for most or all student loan borrowers. It’s possible Biden will reconsider and cancel as much as $50,000 in student loans. This is the proposal endorsed by Senator Elizabeth Warren (D-MA), Senate Majority Leader Chuck Schumer (D-NY), and countless civic and social organizations. However, the base case assumption is that Biden will support $10,000 in student loan cancellations with income caps. If Biden proceeds with sweeping student loan relief, he should answer these 5 serious questions about student loan forgiveness.
Student loans: next steps
How can you qualify for student loan forgiveness? For now, it’s a waiting game to see if Biden issues a sweeping student loan forgiveness. However, there are several ways to obtain student loan forgiveness from existing federal programs. For example, there is now student loan forgiveness through income-based repayment, borrower defense until repayment, government loan forgiveness, teacher loan forgiveness, and other programs. The good news is that this student loan relief is available regardless of whether Biden proceeds with sweeping student loan forgiveness. You should review all of your student loan repayment options, especially since the student loan temporary exemption ends on August 31, 2022. Here are some good starting points: