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, large-scale student loan relief has eluded student borrowers. Last week, the White House said the president had not decided to forgive $10,000 in student debt for borrowers. Biden could have announced a potential student loan cancellation plan last Saturday when he delivered the commencement address at the University of Delaware. However, the president did not refer to student loan forgiveness during his remarks. Now student borrowers are wondering if the president will use executive power to cancel student loans for most or all student borrowers. Or will the president continue to focus on targeted student loan forgiveness?
Biden canceled $25 billion in student loan debt
Biden canceled $25 billion in student loans for 1.3 million student borrowers. This includes:
- Defense of the borrower until reimbursement: $7.9 billion for 690,000 borrowers for borrower defense against student loan repayments and school closures.
- Public service loan forgiveness: $7.3 billion for over 127,000 student borrowers through public service loan forgiveness.
- A permanent disability: Over $8.5 billion for over 400,000 borrowers with total and permanent disabilities.
This student loan forgiveness includes $5.8 billion in student loan debt that Biden canceled this week. The Biden administration also made major changes to income-driven repayment that will help more student borrowers qualify for student loan forgiveness.
Student borrowers wonder when Biden will forgive student loans
Borrowers and student loan advocates are pushing the president to decide whether to enact large-scale student loan forgiveness for millions of student borrowers. In late April, Biden said he would decide in a few weeks. However, that was almost five weeks ago — and Biden has not commented further on the next steps in canceling student loans. This left student borrowers in student loan limbo. The Biden administration issued $10,000 in student loan forgiveness with potential income caps of $150,000 for individuals and $300,000 for married or joint filers. Biden also said he wasn’t considering $50,000 in student loan forgiveness. The notion of income caps and limited student loan relief has not resonated well with progressive members of Congress as well as key advocates. (It also didn’t resonate well with those people, who probably won’t qualify for student loan forgiveness.) They argue that Biden should further cancel student debt for most or all student borrowers. Biden may reconsider and cancel up to $50,000 in student loans. It’s the proposal that Sen. Elizabeth Warren (D-MA), Senate Majority Leader Chuck Schumer (D-NY) and countless civic and social organizations have backed. However, the baseline assumption is that Biden will support $10,000 in student loan forgiveness with income caps. If Biden delivers broad 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 determine whether Biden enacts a broad student loan forgiveness. That said, there are several options for getting student loan forgiveness from existing federal programs. For example, there is now student loan forgiveness available through income-based repayment, borrower defense of repayment, civil service loan forgiveness, teacher loan forgiveness and other programs. The good news is that this student loan relief is available whether or not Biden proceeds with large-scale student loan forgiveness. You should evaluate all of your student loan repayment options, especially since temporary student loan relief ends on August 31, 2022. Here are some good places to start: