Biden student loans
Biden student loans refers to Biden’s plan to offer relief to student loan borrowers who have been struggling with their debt. Although Biden is not the frontrunner in the 2020 Democratic Primary, he has made some good policy proposals such as this student loan relief one.
Joe Biden, while running for President, promised $10,000 in student loan forgiveness per borrower. Naturally, borrowers want to find out the most recent news about President Biden’s student loans forgiveness program. Here are some recent developments and the next steps.
Recent Updates on Biden Student Loan Forgiveness
In a Twitter video, President Biden announced that the pause in federal student loan repayments would continue until August 31, 2022. The President concluded the video by reminding borrowers that studentaid.gov is available for help in preparing for repayment. Federal student loan borrowers have been in uncertainty since March 2020, when they were not required to pay. An announcement regarding the payment pause and large-scale student loan forgiveness will not be made until the summer.
The Administration has focused its efforts on releasing student loans that were borrowed to attend for profit colleges. The Education Department announced that a $5.8B group discharge was made to cancel the loans associated with these schools as of June 1, 2022.
Joe Biden announced on December 22, 2021 that he had extended the federal student loan payment suspension and interest waiver for the third time. Federal student loans will remain interest-free through May 1, 2022. The announcement did not mention any loan cancellation or forgiveness program the Biden administration may be considering, but President Biden asked borrowers “to do their part” in preparing for repayment.
This extension was somewhat unexpected after the Administration stated that August’s announcement would be the last extension of the student loan interest waiver, which was established as part of the CARES Act. Jen Psaki, White House Press Secretary, said that President Biden had not yet made a decision on whether to extend the payment pause or make further student loan forgiveness.
Borrowers are now watching for announcements about significant student loan forgiveness, as President Biden promised during his campaign. It is not clear if the payment pause will be extended past August 2022.
The Biden Administration is continuing to pursue its agenda in Congress with narrow majorities. It has adopted a fragmented approach to student debt relief, while exploring its legal authority to pursue loan forgiveness programs that are more extensive without congressional support.
According to the Education Department factsheet, a revamp of the Public Service loan forgiveness program was also announced recently to “restore PSLF’s promise.” One-time waivers that allow payments from federal student loans, even those not eligible, to count towards progress toward Public Service Loan Forgiveness are a key part of this development.
On August 19, the Department of Education announced that $5.8 billion will be granted to borrowers with total or permanent disabilities. The Department of Education will begin to match data from Social Security Administration to identify borrowers who are eligible for automatic discharge.
Another recent development in Biden student loan forgiveness
The U.S. Department of Education is currently reviewing whether the President is legally authorized to cancel federal student loan debt up to $50,000 through executive action. These reports are not expected to be published in a given timeframe. There could be delays due to the fact that Congress has yet to confirm key policy advisors from both departments.
The White House’s Domestic Policy Council will examine how student loan forgiveness should target, regardless of whether or not it is implemented by executive action or legislation.
Scams that promise student loan forgiveness in return for a fee should be avoided by borrowers. Most likely, student loan forgiveness will be free and automatic when it is implemented. On the StudentAid.gov website, the U.S. Department of Education is going to publish an update.
Recently, the U.S. Department of Education took a few steps towards providing student debt relief. They have the legal authority to do so.
Extend the pause on payments until September 30, 2021.
Biden’s plan would extend the pause on payments until September 30, 2021. However, borrowers who are enrolled in income-driven repayment plans and those with a disability can apply for an extension of up to two years of their current monthly payment amount.
Biden’s plan also simplifies how student loan debt is calculated, so lower-income borrowers are not penalized for having large debt balances.
Zero percent interest on payments through September 30, 2021.
If you have a federal student loan, you’ll be eligible for zero percent interest on all your payments through September 30, 2021.
This is only available to borrowers who receive monthly bills and make repayments directly to their lenders, including any government agencies.
If you have private student loans or if your federal student loans are in deferment or forbearance, then this offer doesn’t apply to you.
Cancel up to $10,000 in student loan debt per person.
How much you can get canceled depends on your income and how much you have already paid off.
If your household makes less than $100,000 per year and is paying off at least 20% of the principal balance on your loans every month, up to $6,500 of your remaining debt could be forgiven after ten years.
If you don’t make enough money or have not paid down 20%, no relief will be available for that year. However, if you qualify for some amount of cancellation this year but not next year, then it must be counted as part of any future relief eligibility calculations as well.
For example: If you had a full-time job when filling out this form but lost it later in 2019 (or never picked one up), then any cancellation earned under those circumstances would count towards a more significant amount being forgiven upon reaching 25 years’ worth of payments made during 2020–2025 (for instance).
To determine whether or not something is eligible for cancellation under this program based on household income alone rather than your own personal earnings history (say if someone else’s name appears on their joint account or bank statements), please refer directly back to section 3 above titled.
Pause wage garnishment for people with federal student loans through September 30, 2021.
If you have federal student loans, you can stop a wage garnishment by applying with the Department of Education. You’ll need to submit an electronic request through their website or call 1-800-557-7394.
If your wages are being garnished, but you haven’t yet submitted a request to stop it, call and ask to be connected with someone in Student Loan Debt Collection Enforcement (SLDCE).
If SLDCE tells you that they don’t have any information on how to deal with your case, tell them that they do. They will likely transfer your call back to the Wage Garnishment Unit (WGU).
When discussing your case with WGU, explain why it is essential for them to not just for this particular payment period but also beyond September 30, 2021, when their ability ends as well as what happened during previous periods in which wages were taken from paychecks without permission or notice before September 30th, 2021. Make sure both parties understand each other’s concerns and need so no one gets confused about what needs to be done next.
If everything goes well, all future payments will be made directly from Social Security or other benefits instead of getting taken out automatically from checking accounts each month until September 30th, 2021, when this specific law expires, along with any other similar laws passed since then as well.
Biden’s plan would also forgive $10,000 for each borrower with a disability and $10,000 per family for those with a deceased parent.
Public service loan forgiveness is a program that forgives all remaining student loan debt for borrowers who have made 120 monthly payments (10 years).
It’s worth noting that this is a cumulative number, so if you decide to stop making payments and restart, later on, it will reset the clock.
If you qualify for public service loan forgiveness, your remaining balance will be forgiven in full. You may still be on the hook for taxes on that amount, depending on how much money you earn each year (or other factors), but it can still be a huge relief to know that your debt is almost over.
Simplify income-driven repayment plans (IDR) | Biden student loans
The Biden student loans plan would simplify income-driven repayment plans (IDR). These plans are designed to help borrowers manage their monthly payments so they can pay off the balance of their student loan debt. Under the Biden student loan program, you would be able to automatically qualify for IDRs by using your tax return data from previous years.
This means that if you use the IRS Data Retrieval Tool when applying for financial aid, you will be automatically signed up for an IDR.
If you have private loans, Biden will allow all federal and some personal loans to be included in your income-driven payment plan without having to consolidate them first. Once again, this is done by using tax information from previous years.
Make Public Service Loan Forgiveness (PSLF) available to more borrowers | Biden student loans
The PSLF program allows student loan borrowers who work in public service to have their loans forgiven after ten years of on-time payments.
The program can be a tremendous financial relief for those who qualify. Still, it’s essential to know that the program is only available to borrowers working in certain types of jobs—namely, government and nonprofit organizations.
Biden can’t cancel all student loans, but he can offer relief to some borrowers
The Biden student loans plan would also forgive $10,000 for each borrower with a disability and $10,000 per family for those with a deceased parent. The Biden student loan proposal is similar to the one he originally outlined in his 2020 campaign launch speech.
Biden has said that the student loan forgiveness would be available only for students who borrowed after June 15, 2020 (and before July 1) to attend an accredited institution that was eligible under Title IV of the Higher Education Act.
It remains unclear whether students who took out loans before this date will also qualify for forgiveness through Biden’s plan if they’ve been making payments on their debts since then.
The former vice president has said he would expand eligibility beyond public universities by offering relief through private institutions as well as community colleges and trade schools where few people get federal loans.
However, it’s unclear how many private institutions participate in student loan programs offered by companies such as Sallie Mae or Nelnet Inc., which may limit your choices when it comes time to pay off your debt.
The Biden student loans plan is short on details, but it appears to be a good start. He has the right idea with extending the student loan interest rate freeze until 2021 and forgiving $10,000 per person or $20,000 per family in loans.
His proposal to simplify income-driven repayment plans (IDR) would also help many borrowers who are currently struggling under confusing programs like PAYE and REPAYE that have high monthly payments but long delays before borrowers can qualify for forgiveness after making ten years’ worth of expenses.
We think providing relief for disabled borrowers also makes sense because they may not be able to work full-time due to their disability, so they’ll need lower monthly payments than those without disabilities who earn higher incomes could afford on their own accord.
You can read my post about medical school student loans.
You can read my post about student loans for trade schools.