What Is Biden’s Student Loan Forgiveness Program?

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Key Takeaways:
  • The Biden student loan forgiveness program has so far cleared about $16 billion in student debt.
  • There are several other options for student loan forgiveness or assistance.
  • See if you qualify for student loan forgiveness or assistance.

The Biden Administration has been working to increase student loan forgiveness efforts to erase education debt for hundreds of thousands. Since he assumed office, Biden’s student loan forgiveness programs have helped eliminate more than $16 billion in student loan debt. These are among many government debt relief programs.

Want to know if you qualify for one of Biden’s student loan forgiveness programs? Read on for more details and tips to help you solve your student debt burden.

Understanding Biden’s Student Loan Forgiveness Programs

When he was campaigning to be president, Joe Biden promised each student loan borrower $10,000 in loan forgiveness. Unfortunately, he and Congress have yet to achieve this goal. But the Biden Administration has successfully deployed different student loan forgiveness initiatives.

In fact, more than 675,000 people have benefited from the elimination of their student debt since January 2021. Still, an estimated 43 million student loan borrowers remain indebted by $1.75 trillion, per the Education Data Initiative.

“The Biden Administration is targeting specific groups dealing with especially oppressive student loan debts,”Melanie Hansen, editor-in-chief of EDI Refinance, says. “Student loan forgiveness can completely wipe out your student loan debts if you qualify for a program.”

Lyle Solomon, a financial expert and attorney with Rocklin, California-headquartered Oak View Law Group, agrees.

“Student loan forgiveness reduces or eliminates the amount of debt owed by the primary borrower and, in some cases, the cosigner. Many forgiveness options are currently available depending on a borrower’s loan type – federal or private loans – and their repayment plan, career, employer, and financial or personal situation,” explains Solomon. “For example, students who attended a predatory for-profit school might be eligible for loan forgiveness.”

Biden Student Debt Care Relief Programs Available

Four programs currently available to eligible borrowers include the Public Service Loan Forgiveness program, the total and permanent disability discharge program, the borrower defense to repayment program, and the closed school discharge program.

Public Service Loan Forgiveness (PSLF) program

The PSLF program provides federal student loan relief to an estimated 70,000 borrowers. Any U.S. federal, state, local or tribal government agency is considered a government employer for the PSLF Program. This includes employers like the U.S. military, public elementary and secondary schools, public colleges and universities, public child and family service agencies, and special governmental districts (including public transportation, water, bridge district, or housing authorities).

In other words, military veterans, public school teachers, firefighters, police officers, nurses, and others are eligible to apply. Qualified borrowers can have their remaining federal loan debt discharged following 120 consecutive eligible payments. To learn if you qualify, check the PSLF help tool.

“For public service workers, a borrower hoping to take advantage of the PSLF waiver must move their Federal Family Education Loans (FFEL) or Perkins loans into a direct consolidation loan. The deadline is October 31, 2022,” says Solomon.

Total and permanent disability (TPD) discharge program

Another option is the TPD discharge program, which can help erase student debt for those who are completely and permanently disabled. Under this program, eligible borrowers are no longer required to pay back their federal student debt, including Perkins loans, Direct Loan Program loans, and FFEL loans.

Typically, to qualify, you have to submit a TPD discharge application and documentation validating that you meet eligibility requirements for being considered fully and permanently disabled. More details are available here.

Borrower defense to repayment (BDR) program

Were you misled by a college or university that engaged in misconduct while you were a student? You may be eligible for forgiveness of some or all of your student debt under the BDR program. You must demonstrate with documentation that the school deceived you or engaged in other misconduct, or that the institution violated state law related to your loan or the educational services provided. For more details or to apply, click here.

“If your school fraudulently persuaded you to take out a loan or borrow money on your behalf without your consent, you may be able to discharge your student debt via this program,” says Abdulrahman Henedy, a financial advisor and founder of Financeive in Grand Rapids, Michigan.

Some 92,000 borrowers are expected to qualify for the BDR program.

Closed school discharge program

Did your school close its doors while you were enrolled as a student or shortly following graduation? If so, you may be eligible for federal student loan forgiveness through the closed school discharge program.

An example of such a school is ITT, which closed in recent years. Some 115,000 borrowers who departed the school in 2008 or thereafter without completing their degree are eligible for this program.

Be aware that you’ll need to obtain your financial aid and academic records if your school closed. And you’ll need to meet other qualification criteria and apply for the program, with full details here.

Other student loan forgiveness programs

These aren’t the only programs that can discharge your student loan debt. There is also the:

  • Teacher loan forgiveness program. Suppose you teach full-time for five complete and consecutive academic years in a low-income elementary school, secondary school, or educational service agency. In that case, you may be eligible for forgiveness of up to $17,500 on your Direct Loan or FFEL Program loans.

  • Perkins loan cancellation and discharge program. You may be eligible to have all or a portion of your Perkins Loan canceled (based on your employment or volunteer service) or discharged (under certain conditions). This includes Perkins Loan Teacher Cancellation.

  • Discharge in bankruptcy program. In some cases, you can have your federal student loan discharged after declaring bankruptcy. However, discharge in bankruptcy is not an automatic process. You have to prove that if you’re forced to repay the loan, you would not be able to maintain a minimal standard of living, that this hardship will continue for a significant portion of the loan repayment period, and that you made good faith efforts to repay the loan before filing bankruptcy. In addition, loan proceeds not used for education costs may be dischargeable under a standard bankruptcy filing.

  • Unpaid refund discharge program. If you withdrew from school and the school didn’t make a required return of loan funds to the loan servicer, you might be eligible for a discharge of the portion of your federal student loan(s) that the school failed to return.

  • Parent PLUS loan discharge program. A parent PLUS loan can be discharged if the parent (not the student on whose behalf they obtained the loan) dies or become totally and permanently disabled, or if your loan is discharged in bankruptcy. Your parent PLUS loan may also be discharged if the child for whom you borrowed dies.

For more information about any of these programs, visit here.

What to consider carefully before applying

Henedy says it’s important to read over eligibility requirements carefully before applying for any of these programs. Also, be realistic about your expectations.

“Borrowers should not make hasty decisions in the hopes of total debt forgiveness,” he says. “It does not appear that significant student debt forgiveness on a wider level will happen anytime soon. Even if Biden or Congress passes a bill, eligibility and debt relief would almost certainly be limited.”

Also, be careful not to fall for a student loan debt forgiveness scam, especially those that offer debt dischargement in exchange for a payment.

“If and when student loan forgiveness is offered, it should be on a free basis based on your eligibility,” adds Henedy.

Alternatives to Biden’s Student Loan Forgiveness

Don’t qualify for any of the Biden student debt care relief programs? Consider alternative strategies to reduce your financial burdens.

Pay as you earn (PAYE) is another good way to get student loan debt relief. Enrolling in the PAYE plan can lower your monthly payments to about 10% of your income. However, you must demonstrate a partial financial hardship, and your total repayment cannot surpass the 10-year basic repayment plan amount,” Solomon continues. “The PAYE plan is only open to new borrowers who have obtained Direct Loans or FFEL loans after October 1, 2007, and who have no prior outstanding balances in either program.”

Or investigate payment assistance programs that may be available in your state.

“Many states may offer debt repayment assistance programs to licensed teachers, nurses, doctors, and lawyers,” says Solomon. “For example,Mississippi’s Teacher Loan Repayment Program pays up to $3,000 per year for four years on bachelor educational loans for teachers with a particular teaching license for each year of teaching full-time in a specific geographic or subject area.”

Alternatively, consider refinancing your federal loans into a private loan if you can benefit from lower interest rates and reduced monthly costs, suggests Henedy.