How To Get $8.1 Billion Biden Student Loan Forgiveness

The Public Service Loan Forgiveness (PSLF) program has been temporarily expanded by the Biden administration, which announced on Friday that it has authorized nearly $8 billion in student loan forgiveness for 145,000 borrowers. But in a matter of months, the program will come to an end. And advocates are calling on Biden to extend it.

The Public Service Loan Forgiveness Program, or PSLF, was started in 2007 to help employees of nonprofits and government agencies get their student loans forgiven after ten years of payments (120 total payments). The overall approval rate for applicants has been low. A September 2021 report from The Washington Post said that only 1 in 5 of the 1.3 million borrowers seeking debt relief through PSLF were on track to get it by 2026.

Who qualifies for the already-approved student loan forgiveness?

Even though most student loans haven’t been forgiven yet, some U.S. borrowers have already gotten some help with their debt. Since President Biden took office, $25 billion in student loans have been wiped out for about 1.3 million borrowers.

In addition to the thousands of borrowers who have had their debts forgiven through the revamped PSLF program, another 690,000 borrowers have had a total of $7.9 billion in student loans forgiven due to borrower defence and school closures. Through total and permanent disability discharge, more than $8.5 billion in debt has been forgiven for more than 400,000 people.

As part of a proposed class-action settlement, the Biden administration agreed last week to get rid of $6 billion in federal student loans for about 200,000 people. The borrowers say that their college lied to them and that the Department of Education took years to respond to their requests for help.

How to qualify for student loan forgiveness

Follow these 7 steps to get your student loan forgiven:

1. Having a full-time job: Work full-time (at least 30 hours a week) for public service or non-profit organization that meets certain requirements. If you don’t work for a qualified employer, you might want to look for a new job so you can get your student loans paid off.
2. Employer Certification: Fill out and send to the U.S. Department of Education an Employer Certification Form every year or when you change jobs.
3. Direct Student Loans: Make sure you have Direct Student Loans. You can check what kind of federal student loans you have by logging in to Federal Student Aid.
4. Student Loan Consolidation: If you have Perkins Loans or FFELP Loans from the government, these are not Direct Loans. But you can get a Direct Loan by putting all of your federal student loans into one. Contact your student loan servicer to combine your existing federal student loans into a Direct Consolidation Loan.
5. Income-Driven Repayment: Sign up for a plan that is based on your income. There are four main payment plans based on income: Income-Based Repayment (ICR), Pay As You Earn (PAYE), Revised Pay As You Earn (REPAYE), and Income-Contingent Repayment (ICR) are all ways to pay back student loans based on your income (ICR).
6. Paying Back Student Loans: Make 120 monthly payments on your student loans. At least most of the payments must be made while in an income-driven repayment plan.
7. Student Loan Forgiveness: If you still owe money on your federal student loans, you can get the rest of them forgiven.

In July or August, Biden is likely to say what he will do to help more people get rid of their student loans.

How to qualify for the limited Student loan forgiveness waiver

Biden erased $25 billion in student loans and proposed big improvements to student loan forgiveness. The U.S. Department of Education introduced a one-time limited waiver to allow borrowers to earn “credit” for prior student loan payments that were ineligible for loan forgiveness.

Student loan borrowers can now count late, partial, and incorrect payments toward the 120-month threshold. You don’t need to apply for a limited waiver, Instead, the Education Department will update your account to reflect the additional student loan payments paid on your behave.

Approximately 9 million borrowers are eligible for public service loan forgiveness. 15% of borrowers have filed documentation to track public service loan forgiveness.

Student loan borrowers await Biden’s decision on loan cancellation. Biden might erase students’ student loans. Such loans could be $10,000 or $50,000. Biden might cancel a different amount or skip large-scale cancellations owing to inflation. Temporary student loan relief ends on August 3, 2022. and Federal student loans will restart starting from the first week of September. Be Prepared for the student loan repayment.