President Joe Biden will forgive $6.2 billion in student loans by changing student loan forgiveness.
Here’s what you need to know.
There is more good news for student borrowers applying for student loan forgiveness. The US Department of Education has identified 100,000 student borrowers who are now eligible for student loan forgiveness due to changes the Biden administration made to the civil service loan forgiveness program in October. In total, these student borrowers will get $6.2 billion in student loan forgiveness. The Ministry of Education notifies these student borrowers of their eligibility for student loan forgiveness, as CNN reported. Ultimately, the Department of Education says 550,000 student borrowers will get student loan forgiveness sooner because of these changes.
Student Loan Forgiveness: Who is Eligible
Who is eligible for this student loan cancellation? Based on major changes to student loan relief, the Biden administration has relaxed requirements for what student loan repayments count for the cancellation of the student loan; which types of student loans count for student loan forgiveness; which employers qualify for student loan forgiveness; and when student loan repayments start counting towards student loan cancellation.
- Accounting for past student loan repayments for student loan forgiveness;
- Count previous student loan payments made for FFELP loans;
- Get credit for canceling your student loan if you used the wrong student loan repayment plan;
- Include past student loan repayments that were late or partial;
- Student loan payments made before student loan consolidation also count;
- Provide credit for student loan repayments even if student borrowers have not made student loan payments due to forbearance, deferral, or other financial hardship; and
- Members of the military can count past student loan repayments while on active duty.
How to Get That Student Loan Forgiveness
Civil service loan forgiveness cancels federal student loans if you meet several conditions. For example, you must work full-time for a public service or qualifying nonprofit employer, enroll in an income-based repayment plan, and make at least 120 monthly student loan payments. After meeting the eligibility criteria, the remaining balance of your federal student loans will be forgiven. To count past student loan repayments that have been deemed ineligible, you can complete a Limited Student Loan Forgiveness Waiver, which is available from the U.S. Department of Education. This limited waiver is available until October 31, 2022. This limited waiver will allow you to count previous payments to help you meet the 120 monthly payment requirement.
Student loans: next steps
Repayment of federal student loans is expected to resume after May 1, 2022. The White House chief of staff said Biden may consider extending temporary student loan relief beyond that date. However, Biden has not made up his mind. Your best plan is not to prepare now for the end of the student loan payment break. This way you are protected no matter what. Start by understanding your best student loan repayment options and acting on them.
Here are some smart ways to pay off student loans faster: