More student loan relief is underway as Biden prepares to leave office. (Stock)
As President Joe Biden’s term draws to a close, he has given out loans to 150,000 more borrowers.
These 150,000 borrowers include nearly 85,000 who attended schools that cheated and defrauded their students, 61,000 borrowers with total and partial disabilities, and 6,100 government employees. The loan forgiveness now brings the number of students whose student loans have been canceled during his administration to more than 5 million, according to a White House release.
The latest wave of debt relief includes 6,100 borrowers who have had $465 million in debt forgiven through the Public Service Loan Forgiveness (PSLF) program. This is proof that programs like these can have the power to reduce the student debt burden.
“Identifying 5 million people for student loan forgiveness means the government is keeping its promises,” said US Education Secretary James Kvaal. “People who can’t pay for their students because they work for the community, have disabilities, were cheated by their colleges, or have spent decades paying are now getting the relief they were promised. These permanent changes will continue for many borrowers. Every year.”
If you want to pay off your personal home loan debt, refinancing can help you lower your interest rate and monthly payment. To see if this is the right option, contact Credible to speak with a student loan expert and have your questions answered.
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New permits for student loan forgiveness
The Supreme Court previously blocked the Biden administration’s plans for broader student loan forgiveness. In 2023, the court stopped the administration from forgiving $ 400 billion in loans affecting more than 40 million borrowers.
In August, the Supreme Court blocked another administration proposal to lower monthly payments and speed up loan forgiveness. After the Supreme Court struck down Biden’s student loan forgiveness plan, Biden introduced SAVE. The White House said the SAVE program could reduce borrowers’ monthly payments to zero dollars, cut monthly costs in half and save those paying at least $1,000 a year.
The Biden administration canceled plans for another student loan forgiveness program in December. Despite losing in the Supreme Court, the administration forgave $183.6 billion in student loans due to improvements used to process PSLF applications and approve disbursements. The number of borrowers approved for PSLF is now 1,069,000 and $78.46 billion compared to 7,000 borrowers who received PSLF at the beginning of the Biden-Harris administration, according to the Department of Education.
In addition, the administration approved $56.5 billion in debt relief for more than 1.4 million borrowers through Income Driven Repayment, including the Savings in Value Education Program. Some borrowers also have access to an additional $900 in Pell Grant funds to pay for school. Additional debt forgiven includes student debt owed to their school borrowers who have defrauded, seen their institutions close quickly, or are covered by related court fees.
Private student loan borrowers cannot benefit from federal loan assistance. But you can lower your monthly payments by refinancing at a lower interest rate. Visit Credible to talk to an expert and have your questions answered.
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Debt forgiveness can be preventedalways
Republican Representative Glenn Grothman (R-WI) introduced a bill during the last Congress that effectively blocked any future plans to cancel many student loans. The Taxpayer Protection from Student Loan Repayment Act prevents the Secretary of Education from issuing executive orders or actions that increase federal student loan program costs.
The bill was eventually included in the College Tax Cuts Act, which did not reach a House floor vote.
“Congress may consider taking action to prevent future administrations from forgiving debt,” said Preston Cooper, senior fellow at the American Enterprise Institute, in a blog post.
Cooper said Republicans may not want to risk the chance that the next Democratic administration will successfully pursue a loan cancellation strategy that is less vulnerable to legal challenges.
Borrowers with private student loans can get relief by refinancing to lower their monthly payments. An online tool like Credible can help you compare student loan repayment rates before you apply to help you find the best deal.
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