The Biden administration has approved $32 billion in student loan forgiveness over the course of the last year, according to the Department of Education. Not only is more on the way, but there are still opportunities for borrowers to apply for relief, even as Biden reportedly considers even more widespread student loan cancellation.
Here are the details.
Biden Has Green-Lit $32 Billion in ‘Targeted’ Student Loan Forgiveness
The Education Department is touting at least $32 billion in student loan forgiveness approved so far through its “targeted” initiatives that have expanded access and relaxed eligibility rules for existing student loan forgiveness programs. The largest targeted initiatives are the following:
- $13 billion in student loan cancellation for at least one million borrowers harmed by their schools through misrepresentations or school closures. The relief is being provided through the Borrower Defense to Repayment and Closed School Discharge programs, and includes blanket relief for borrowers who attended ITT Technical Institutes and Corinthian Colleges.
- $9.6 billion in student loan forgiveness under the Limited PSLF Waiver, an initiative that temporarily expands relief under the Public Service Loan Forgiveness program. The Department estimates that 175,000 borrowers have benefited so far.
- $9 billion in student loan discharges for 425,000 disabled borrowers through the Total and Permanent Disability (TPD) Discharge program. This includes borrowers who had prior loan reinstatements reversed due to bureaucratic issues, as well as borrowers who had their loans automatically discharged through a data-sharing initiative between the Education Department and Social Security Administration.
More Student Loan Forgiveness Is Coming
The $32 billion in student loan forgiveness the Biden administration has approved so far does not include other relief, including additional loan cancellation expected under the Limited PSLF Waiver and TPD Discharge programs. It also does not include the following:
- $6 billion in projected student loan forgiveness for over 264,000 borrowers as part of a proposed settlement agreement in Sweet v. Cardona, a lawsuit between the Education Department and a class of student loan borrowers over stalled Borrower Defense to Repayment applications. The proposed settlement is awaiting final court approval, which should happen in early November.
- Student loan forgiveness through the IDR Account Adjustment, an initiative designed to provide retroactive credit towards borrowers’ student loan forgiveness term under federal income-driven repayment plans. The Education Department has not provided a projected student loan forgiveness estimate under the initiative, but officials anticipate that millions of borrowers will benefit, and any borrower with loans that have accumulated time in repayment of at least 20 or 25 years will see automatic student loan forgiveness. The Education Department is not expected to begin implementation of this initiative until this fall, with completion not expected until January at the earliest.
President Biden is reportedly also considering using executive action to enact even broader student loan forgiveness. He has not made a final decision, although he has stated that he expects to decide by August 31. Most recent reports suggest Biden is considering $10,000 in federal student loan forgiveness for borrowers, with some income restrictions to limit eligibility. The Education Department reportedly has a plan in place to implement the initiative if Biden decides to proceed.
How To Apply For Student Loan Forgiveness Initiatives
Student loan borrowers may still have an opportunity to benefit from these student loan forgiveness initiatives:
- Borrowers can submit an application for Borrower Defense to Repayment at any time. However, borrowers who attended a proposed list of schools and who submit their Borrower Defense application before final approval of the Sweet v. Cardona settlement (which is anticipated to happen by early November) may get some added benefits. You can learn more about Sweet v. Cardona here.
- The Limited PSLF Waiver is available until October 31, although advocacy groups are pushing the Biden administration to extend the relief. Some borrowers will need to take action to benefit from the waiver, such as consolidating their loans or submitting PSLF employment certification forms. Learn more about the Limited PSLF Waiver and how to apply here.
- The IDR Account Adjustment is just getting started. Some borrowers may need to take action to benefit from the initiative, such as consolidating their FFEL-program loans. Learn more about the IDR Account Adjustment and how to apply here.
- The Total and Permanent Disability (TPD) Discharge program continues to enjoy some temporary flexibilities, including a waiver of post-discharge income monitoring. Learn more about the TPD Discharge program and how to apply here.