Student Loan Forgiveness

According to the Department of Education, as of October 25, the total amount of debt that has been forgiven due to existing forgiveness programs since President Biden's tenure reached approximately $38 billion. According to estimates provided by the Department of Education, over 1.75 million borrowers have had their debt completely wiped off thanks to targeted one-time fixes:

• Over fourteen billion dollars for one million debtors whose colleges either cheated them out of their money or went out of business.
• Through the Public Service Loan Forgiveness program, $14 billion will be provided to more than 236,000 debtors.
• There was a total and permanent disability discharge amount of $9 billion, and it impacted more than 425,000 borrowers.

Borrowers Who Are Seeking Forgiveness via Other Means Are Eligible For Cancellation under Biden's Plan

The idea to forgive federal students' student loan debt, which may total up to $20,000, was unveiled by Vice President Joe Biden. Borrowers who have loans that qualify for the Biden debt relief program and who are simultaneously pursuing other kinds of loan forgiveness, such as PSLF, may also be eligible for the program.

Borrowers currently participating in an income-driven repayment plan will likely be among those whose loans are immediately terminated, given the Department of Education already has the borrower's income information on file.

Borrowers eligible for Biden's automatic cancellation may opt out of the program if they have concerns about the impact on state taxes. Currently, no states tax loan cancellations like Biden's as income. Student loan borrowers who aren't currently participating in an income-driven repayment plan but are interested in PSLF must apply for debt forgiveness.

Corrections Made To the Borrower Defense and the Closed School Discharge

Borrowers have the program to get debt relief if they can prove that their schools committed fraud against them via borrower defense or if their schools collapse before they can finish their degree programs through closed school discharge. On August 30, the department canceled any federal student loans held by borrowers who attended Westwood College between 2001 and 2015, when the college finally shut its doors. According to the Department of Education, Westwood deliberately misled its pupils about the job market and career opportunities. Regardless of whether or not they have filed a borrower defense claim, about 79,000 borrowers will be eligible to get relief for $1.5 billion.

On August 16, the U.S. Department of Education made public a plan to collectively discharge all federal student loans taken out by students attending ITT Technical Institute between January 1, 2005, and September 30, 2016, the month ITT Tech shut its doors for good. Even if the borrower still needs to complete an application for borrower defense, their debt will be dismissed if they satisfy these criteria and fulfill all requirements. In addition to the news just announced, the debt of about one hundred debtors who attended Kaplan Career Institute will also be canceled.

The agency also announced that it would be trying to get back the money it had paid for claims related to borrower defense for the first time. It has been determined that the Education Department is entitled to receive roughly 24 million dollars from DeVry University.

The Education Agency distributed funds totaling $5.8 billion to 560,000 former Corinthian Colleges students on June 1. This was the largest discharge ever handled by the division. After facing several allegations and lawsuits, for-profit education operator Corinthian Colleges declared bankruptcy and shut down operations in April 2015. Accusations and litigation included, among other things, exaggerating job placement numbers, participating in predatory loan practices, and preying on students from marginalized groups.

Income-Driven Repayment Forgiveness One-Time Review

Those borrowers who provided misleading information about their income-driven repayment alternatives will be offered a second opportunity for their previous payments to be used toward the necessary amount for loan forgiveness. This new one-time assessment of prior payments was announced in April by the Department of Education. It is anticipated that it will result in 3.6 million borrowers inching closer to having their student loans forgiven and thousands more crossing the finish line.

The realization that millions of borrowers were inappropriately directed into forbearance, which suspends payments but enables interest to continue to accrue, prompted the examination of payments. As a result of these missed payments, neither the 120 required for Public Service Loan Forgiveness nor the 240 to 300 required for income-driven payback forgiveness were met.

All federal student loan payments will be suspended until at least the end of August without accruing interest. However, many borrowers will find that their balances have been completely wiped out or the number of payments owed has been significantly reduced due to an ongoing campaign to find and fix errors and administrative failures.