As President Joe Biden’s administration approaches its conclusion, the government has announced federal student loan relief for an additional 150,000 borrowers.
Among those receiving relief, nearly 85,000 individuals attended schools found guilty of defrauding students, while 61,000 have been identified as having total and permanent disabilities. Additionally, around 6,100 public service workers will benefit from this initiative. These recent cancellations increase the total number of students who have had their debt forgiven under Biden’s leadership to over 5 million, as highlighted in a recent White House announcement.
This latest round of debt relief facilitates the forgiveness of $465 million in debt for 6,100 borrowers through the Public Service Loan Forgiveness (PSLF) program, further demonstrating the impact of such initiatives on easing the financial burden of student loan debt.
U.S. Under Secretary of Education James Kvaal emphasized the significance of these efforts, stating, “Identifying 5 million people for student loan forgiveness means the federal government is finally keeping its promises. People who cannot afford their student loans because they are in public service, have disabilities, were cheated by their college, or who have completed decades of payments are now getting the relief they were promised. These permanent reforms will continue for more and more borrowers every year.”
For those looking to manage private student loan debt, refinancing may provide an opportunity to reduce monthly payments and interest rates. Interested individuals can reach out to Credible for further assistance and guidance.
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New student loan forgiveness approvals
The Biden administration has faced setbacks in its broader student loan forgiveness initiatives, with the Supreme Court previously ruling against plans to cancel $400 billion in debt affecting over 40 million borrowers. In August 2023, the court also blocked another proposal aimed at lowering monthly payments and expediting loan forgiveness.
Following these legal challenges, the Biden administration introduced the SAVE plan, which, according to the White House, has the potential to lower monthly payments to zero dollars, achieve monthly cost reductions by half, and save borrowers at least $1,000 annually.
In December, the administration withdrew plans for an alternative forgiveness strategy. Despite these judicial hurdles, progress has been made, with approximately $183.6 billion in student debt relieved through alterations made to facilitate the processing of PSLF applications and subsequent approvals. As a result, the total number of approved PSLF borrowers has now reached 1,069,000, amounting to $78.46 billion, a significant increase from merely 7,000 borrowers at the beginning of Biden’s term, as reported by the Department of Education.
Additionally, the administration has granted $56.5 billion in debt relief through Income-Driven Repayment programs, including the new SAVE initiative. Borrowers may also access an extra $900 in Pell Grant funds to help cover educational expenses. The debt relief extends to those affected by closures of their educational institutions or those defrauded by their schools, along with other related legal settlements.
While federal relief options may not extend to private student loan borrowers, refinancing remains a viable option to reduce monthly payments. To explore refinancing opportunities, individuals can consult with Credible for expert advice and assistance.
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Debt forgiveness could be blocked for future administrations
This initiative was eventually included in the College Cost Reduction Act, which, however, did not go to a vote in the House. Preston Cooper, a senior fellow at the American Enterprise Institute, observed in a blog post that “Congress might still consider taking action to block future administrations from forgiving debts,” adding that Republicans may want to preemptively restrict the possibility of a more robust, legally sound loan cancellation strategy under a future Democratic administration.
Borrowers holding private student loans can seek relief through refinancing options to lower their monthly payments. Utilizing an online platform such as Credible can assist in comparing student loan refinancing rates to identify the most suitable offers.
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