Student Loan Forgiveness… Are You Eligible?
- Posted: March 23, 2021
Among the various issues facing young adults today, student loans are close to the top of the priority list. Sadly, there are lots of young adults who are saddled with hundreds of thousands of dollars in student loans. Even when paying these loans off aggressively, it could take decades to pay them back. Fortunately, the Biden Administration is taking steps to increase the number of people who are eligible for student loan forgiveness.
Even if you do not qualify for loan forgiveness, you might qualify for income-based repayment plans. You might want to reach out to your loan officer to explore this option as well.
A New Interpretation Under the Borrower Defense to Repayment Program
The debt relief bill being pushed through by the Biden Administration is going to be placed under something called the Borrower Defense to Repayment Program. This program was originally designed to provide access to federal student debt forgiveness for students who were defrauded, misled, or harmed by their colleges or universities. Under the previous administration, the interpretation of this repayment program was relatively narrow. Now, the Biden Administration is expanding the interpretation of this bill, providing access to student loan forgiveness to countless people who may not have received it under the prior administration.
The Biden Administration Will Forgive $1 Billion in Student Debt
Even though it is good that the Biden Administration is signaling that the Borrower Defense to Repayment Program is going to be expanded, the total amount forgiven, right now, is approximately 1 billion dollars. This may sound like a lot; however, the debt is going to be canceled for approximately 70 mm borrowers. More than 200,000 student loan borrowers have already applied for student loan forgiveness under the Borrower Defense to Repayment Program. This means that more than 130,000 people are still awaiting their decisions.
Furthermore, the hopes of loan forgiveness for all of these people recently took a hit, as a federal court hearing recently upheld the new rules under the Borrower Defense to Repayment Program.
Will Future Steps Be Taken?
It is clear that reform is required when it comes to student loan forgiveness. Young adults should not be saddled with hundreds of thousands of dollars in debt when they are trying to start their lives. Future steps need to be taken to address this significant issue. For example, Congress could decide to pass new legislation reversing the regulations that are currently in place. In addition, class action lawsuits and litigation are still playing out in front of the court. All three branches of government are currently trying to address the issue of student loan forgiveness. What do students need to do in the meantime?
Who Qualifies for Student Loan Forgiveness?
Lots of students are checking their accounts to see if their loans have been forgiven. Even though this is one way to do so, you may want to reach out directly to your loan officer to see if you qualify. Or, if you applied for student loan forgiveness already, you might want to reach out to the contact person on that application.
Refinancing Options Are Available
If you do not qualify for student loan forgiveness under the Borrower Defense to Repayment Program, there are refinancing options available. You can choose to consolidate your loans into a single monthly payment at a lower interest rate. You can do this in either the public or private sectors. Furthermore, you might also be able to qualify for loan forgiveness through public service, as Biden may expand eligibility for this option. If you are able to donate time to an underserved area of the country, you may be able to get your public loans forgiven. Make sure you explore all options available if you are looking for loan forgiveness.