Student Loan Forgiveness Discharge Additional $4.9 Billion: Who's Eligible for Latest Debt Relief?

By Kareen Liez , Parent Herald Jan 22, 08:40 am

To further alleviate the financial burdens of American borrowers, the Biden administration has declared the discharge of an additional $4.9 billion in student loan debt. This announcement by the Education Department impacts more than 73,600 borrowers, bringing the total amount of discharged debt under President Joe Biden's leadership to an impressive $136.6 billion, providing relief for over 3.7 million borrowers.

A significant chunk of the latest discharges, totaling $3.2 billion, is earmarked for 43,900 borrowers enrolled in the Public Service Loan Forgiveness (PSLF) program. This includes those who have benefitted from the Biden-Harris Administration's limited PSLF waiver as well as regulatory improvements made to the program by the Administration.

Student Loan Forgiveness — (Photo : AI Generated/Kareen Liez)

Since taking office, the Biden administration has forgiven a substantial $56.7 billion for 793,400 borrowers through the PSLF program. This initiative benefits professionals in public service jobs, including teachers, nurses, doctors, lawyers, and military service members who may not qualify for alternative military loan forgiveness programs.

$1.7 Billion Allocated for One-Time Income-Driven Repayment Adjustment

Under the banner of income-driven repayment plans, $1.7 billion has been disbursed to 29,700 borrowers through a one-time payment adjustment. This initiative, introduced last year, seeks to rectify errors caused by loan servicers and ensures eligible borrowers receive proper credit for months that were previously excluded from forgiveness calculations.

"The nearly $5 billion in additional debt relief announced today will go to teachers, social workers, and other public servants whose service to our communities have earned them Public Service Loan Forgiveness, as well as borrowers qualifying for income-driven repayment forgiveness because their payments are for the first time being accurately accounted for," stated Secretary Cardona in a press statement released on Thursday.

The one-time payment adjustment for income-driven repayment plans, unveiled last year, is progressing in waves, with eligible borrowers receiving notifications via email. This adjustment corrects errors made by loan servicers, ensuring that previously ineligible months contribute toward forgiveness. Discharges for borrowers in repayment for 20 to 25 years are ongoing and expected to be completed by the summer.

Who is Eligible for the Latest Student Loan Relief?

The Biden administration's student loan repayment plan brings a major boon for certain borrowers, canceling debts of those who took out $12,000 or less after a decade in repayment-half the time compared to previous plans. In a recent announcement, the administration revealed an additional positive development: eligible borrowers can expect their debt to be canceled as early as February, nearly six months ahead of the original schedule.

The U.S. Department of Education is actively promoting the Saving on a Valuable Education (SAVE) plan, aiming to encourage qualifying borrowers, especially those eligible for immediate forgiveness, to sign up. For individuals who borrowed $12,000 or less for college and are enrolled in the SAVE Plan, loan forgiveness may occur after just 10 years of payments. Those eligible for early forgiveness will witness automatic debt cancellation starting next month, without requiring any action on their part.

To sum up, in order to determine eligibility for early forgiveness, borrowers can answer three key questions:
1. Are you enrolled in the SAVE plan?
2. Did you borrow $12,000 or less in student loans?
3. Have you been in repayment for a decade or longer?

Experts recommend that borrowers not currently enrolled in the SAVE plan sign up promptly to expedite their forgiveness. It's crucial to note that months during the pandemic-era payment pause count toward the 10-year timeline, regardless of whether or not individuals were actively paying down their student debt. Secure your financial future by taking advantage of these accelerated debt relief opportunities.

Additional Relief for Disabled and Defrauded Borrowers

Beyond the relief provided to PSLF and IDR borrowers, the Education Department disclosed that almost 513,000 borrowers with total and permanent disabilities received $11.7 billion in debt discharges. Additionally, over 1.3 million borrowers defrauded by their schools have been granted $22.5 billion in discharges under the borrower defense discharge program.

The continued efforts to address the student loan debt crisis underscore the Biden administration's commitment to providing financial relief and rectifying long-standing issues within the student loan system.