Biden has forgiven $15 billion in student loan debt since taking office
The Department of Education has paid off nearly $15 billion in student loan debt through executive action since President Joe Biden took office a year ago, according to a statement.
More than 675,000 borrowers have qualified for student loan forgiveness through programs such as Public Service Loan Forgiveness (PSLF), Borrower Defense of Repayment, Closed School Exits and Fees total and permanent disability (TPD).
However, many borrowers have yet to benefit from their student loan forgiveness. The Education Data Initiative estimates that about 43.2 million Americans still owe $1.75 trillion in student debt, or nearly $40,000 per borrower.
Keep reading to learn more about Biden’s student loan forgiveness plans, as well as alternative student debt repayment options like refinancing. You can learn more about student loan refinancing by contacting a knowledgeable loan expert at Credible.
WARREN, PROGRESSIVES INCREASE PRESSURE ON BIDEN TO CANCEL STUDENT LOANS
Who got student loan forgiveness under Biden?
As a presidential candidate, Biden campaigned to forgive up to $10,000 in federal student loan debt per borrower. Although the President did not enact widespread student loan forgiveness, he did provide approximately $15 billion in debt forgiveness through the following programs:
- TPD dumps. More than 400,000 people with total and permanent disabilities have had their student debt canceled for a total of $7 billion. The Department of Education used existing Social Security Administration (SSA) data to automatically discharge loans from qualified borrowers – previously, such borrowers had to apply for relief on the Federal Student Aid (FSA) website. .
- Civil Service Loan Cancellation Program. The Biden administration recently announced changes to the PSLF program, making it easier for applicants to receive credit for past repayment periods. More than 70,000 borrowers have received forgiveness through the PSLF’s limited relief, totaling nearly $5 billion in student loan releases.
- Defense of the borrower until repayment. In June, the Department of Education approved borrower defense requests for 18,000 students who attended ITT Technical Institute, totaling $500 million in student loan relief. This brought the total defense loan cancellation of borrowers under the Biden administration to $1.5 billion for approximately 92,000 borrowers.
- School outings closed. Another 115,000 ITT Tech students have qualified for more than $1.26 billion in student loan forgiveness under the closed school exit program. These borrowers did not earn their degree or credentials at the now defunct institution and dropped out on or after March 31, 2008.
If you are not eligible for forgiveness, you may be considering other methods of repaying your student loan. One of these methods is refinancing, in which you take out a private student loan with better terms to pay off your existing student debt.
Student loan refinancing can help you lower your monthly payments, pay off debt faster, and save money over time with a lower interest rate. You can compare student loan refinance rates on Credible for free without affecting your credit score and determine if this debt repayment strategy is right for you.
BIDEN ADMINISTRATION STARTS NOTIFYING BORROWERS OF STUDENT LOAN SERVICE CHANGES
What to do if you don’t qualify for student loan forgiveness
While thousands of student borrowers have had their student loan debt forgiven since President Biden took office, millions more have still not benefited from having their student loans forgiven. If you don’t qualify for student loan relief, consider some alternative debt repayment options:
- Sign up for an IDR plan. Income-contingent repayment allows federal borrowers to limit their monthly student loan repayments to 10-20% of their disposable income. You can subscribe to an IDR plan on ASF website.
- Request additional federal forbearance. The current COVID-19 forbearance period ends on May 1, 2022, but some borrowers with federal student loans may need more time before payments resume. It may be possible to qualify for up to 36 months of additional forbearance through a economic difficulties Where report of unemployment request.
- Reduce your monthly payments with refinancing. A recent analysis by Credible found that well-qualified borrowers who refinanced their student loan debt were able to reduce their monthly payments by an average of $250, all without increasing the total interest cost over the life of the loan.
BIDEN HAS NO POWER TO CANCEL STUDENT DEBT, SAYS PELOSI
Keep in mind that refinancing a private loan would make you ineligible for certain federal benefits, such as income-contingent repayment (IDR) plans and some student loan forgiveness programs. If you don’t plan to use these federal programs or don’t have private student loans, it may be worth refinancing while interest rates are at record lows.
You can browse current student loan refinance rates in the table below and visit Credible to compare rates from multiple lenders. This way, you can find the lowest possible interest rate for your financial situation.
CAPITAL ONE LAUNCHES NEW CREDIT CARDS FOR STUDENTS
Do you have a financial question, but you don’t know who to contact? Email the Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.