There are at least 5 ways that President Joe Biden can get more student loan forgiveness.
Here’s what you need to know – and What this means for your student loans,
It’s no secret that with the end of temporary student loan relief, student loan borrowers are preparing to restart federal student loan payments on February 1, 2022. While many student loan borrowers will refinance student loans, other borrowers may be wondering how to get student loan forgiveness. Biden has canceled $11.5 billion in student loans since becoming president. The US Department of Education announced that $2 billion of student loans would be canceled within weeks. Even with this announcement, and the easing of student loan forgiveness rules, here are 5 ways Biden could get more student loan forgiveness.
1. Cancel Student Loans for Most Student Loan Borrowers
Widespread student loan cancellation is the most obvious way Biden can cancel more student loans. For example, Biden can cancel student loans of up to $10,000 for student loan borrowers. (Here’s who qualifies for student loan forgiveness right now). It is unlikely that Biden would consider canceling student loans of up to $50,000, and there are serious doubts whether Biden has the legal authority to act unilaterally without further authorization from Congress. If Biden moves to cancel student loans, the question becomes who will qualify for student loan forgiveness. Senate Majority Leaders Chuck Schumer (D-MY) and Sen. Elizabeth Warren (D-MA) say only student loan borrowers who make less than $125,000 will be eligible for student loan cancellation. However, if Biden does go ahead with broad-scale student loan forgiveness, expect the income limit to be lower with a focus on low-income borrowers. (These borrowers do not qualify for limited student loan forgiveness).
2. Student Loan Forgiveness After 10 Years
Biden can automatically cancel student loans after 10 years of student loan payments for student loan borrowers. (How to Apply for Student Loan Forgiveness During the Biden Administration). Currently, to receive student loan forgiveness, public servants must make 120 monthly payments and meet certain requirements. While it can take 10 years, some student loan borrowers take more than 10 years to get student loan forgiveness. If Congress intended to reward public servants such as police officers, teachers, military soldiers, firefighters and first responders who served 10 years, Biden could work with Congress to make guaranteed student loan forgiveness a reality after 10 years. Were.
3. Automate Student Loan Cancellation
Student loan borrowers want to know how to qualify for automatic student loan cancellation. While most borrowers must apply for student loan forgiveness, there are some circumstances in which student loan cancellation is automatic. As with most student loan forgiveness, there are applications, paperwork and, in some cases, a long waiting period. This creates uncertainty for student loan borrowers and more work for public servants in Washington who enforce student loan cancellation. (Here’s who qualifies for student loan forgiveness right now). One solution is to make student loan cancellation automatic for certain circumstances. For example, student loan borrowers with total and permanent disability should be able to cancel student loans through data matching with the US Social Security Administration or the US Department of Veterans Affairs. Similarly, while the Biden administration has relaxed public loan forgiveness rules to allow more student loans to cancel their student loans, the changes are only temporary. ,How to Apply for Limited Student Loan ForgivenessA more seamless process for student loan forgiveness can help borrowers and save time processing additional paperwork.
4. Lower Monthly Student Loan Payments for These Borrowers
As a presidential candidate, Biden proposed reducing the percentage a borrower pays each month for student loans on an income-driven repayment plan. Currently, income-driven repayment plans such as IBR, PAYE, REPAYE and ICR require that you pay 10-20% of your monthly discretionary income toward your federal student loans. Biden proposed capping the percentage at 5%. With a lower income limit, more borrowers can avoid student loan delinquency and student loan default. As a presidential candidate, President Donald Trump proposed waiving student loans for graduates after 15 years through an income-driven repayment plan (instead of 20 years), which allows student loan borrowers to get student loans sooner. Forgiveness can help. (How to Apply for Student Loan Forgiveness).
5. Give Partial Student Loan Forgiveness
Most student loan forgiveness is total student loan cancellation. You are either eligible or not. Think income-driven repayment plans or public service loan forgiveness. That said, it is possible to obtain partial student loan forgiveness through Borrower Defense for Repayment, for example. (These borrowers can get further student loan forgiveness). Biden could help more student loan borrowers get student loan forgiveness if partial student loan forgiveness is extended. That way, student loan borrowers can either qualify for student loan cancellation sooner or at least get some student loan forgiveness. For example, Biden proposed reducing the period of public service loan forgiveness to five years and providing $10,000 a year for student loan forgiveness. This is different from the current, all or none existing option of total student loan forgiveness or no student loan forgiveness.
As the Biden administration considers next steps on student loan cancellation, expect more borrowers to qualify for student loan forgiveness. With the priority of student loan cancellation targeted at broad-scale student loan cancellation, these policy recommendations could help shape the future of student loan relief. Since temporary student loan forbearance expires on January 31, 2022, make sure you fully understand all of your options. Here are some popular ways to pay off student loans:
Student Loans: Related Reading
How to Qualify for Automatic Student Loan Forgiveness
How to Apply for Limited Student Loan Forgiveness
Education Department to cancel $2 billion student loans
Here’s Who Eligible For Student Loan Forgiveness Right Now