Biden cancels student loans with a week left in his term


More student debt relief is on the way as Biden prepares to leave office. (iStock)

As President Joe Biden’s term comes to an end, he has granted federal student loan relief to an additional 150,000 borrowers.

Those 150,000 borrowers include nearly 85,000 who attended schools that cheated and defrauded their students, 61,000 totally and permanently disabled borrowers and 6,100 public service workers. Debt forgiveness brings the number of students who have had their student debt canceled during his administration to more than 5 million, according to a statement from the White House.

The latest wave of debt relief includes 6,100 borrowers receiving $465 million in debt relief through the Public Service Loan Forgiveness (PSLF) program. This is a testament to the potential of these programs to ease student debt burdens.

“Identifying 5 million people for student loan forgiveness means the federal government is finally making good on its promises,” said U.S. Assistant Secretary of Education James Kvaal. he said. “People who can’t repay their student loans because they’re in public service, have disabilities, were cheated by their college, or completed decades of payments are now getting the relief they were promised. These permanent reforms will continue for more and more borrowers every year.”

If you want to pay off your private student loan debt, a refinance can help lower your interest rate and your monthly payment. To see if this is the correct option, contact Credible to speak with a student loan expert and answer your questions.

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New student loan forgiveness approvals

The Supreme Court previously blocked the Biden administration’s plans for broader student loan forgiveness. In 2023, the court prevented the administration from forgiving $400 billion in debt affects more than 40 million borrowers.

In August, the Supreme Court shut down another administration proposal to lower monthly payments and speed up loan forgiveness. After the Supreme Court overturned Biden’s student loan forgiveness planBiden introduced SAVE. The the White House said that the SAVE plan could drop borrowers’ monthly payments to zero dollars, cut monthly costs in half and save borrowers at least $1,000 a year.

The Biden administration removed the plans for an alternative student debt forgiveness plan in December. Despite losing at the Supreme Court, the administration has forgiven about $183.6 billion in student debt thanks to the fixes. implemented to process PSLF applications and approve the registrations. The total number of borrowers approved for PSLF is now 1,069,000 and $78.46 billion compared to 7,000 borrowers who had received PSLF at the start 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-based repayment, including the Savings in a Valuable Education SAVE plan. Some borrowers also have access to an additional $900 in Pell Grant funds to pay for school. Additional debt forgiven includes student debt from borrowers whose schools defrauded, saw their institutions shuttered hastily or are covered by related court settlements.

Private student loan borrowers are not eligible for federal loan relief. But you can lower your monthly payments by refinancing to a lower interest rate. Visit Credible to speak with an expert and get your questions answered.

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Debt forgiveness could be blockednever

Republican Representative Glenn Grothman (R-WI) introduced a bill during the last Congress that effectively blocked any future massive student loan cancellation plans. The Student Loan Rescue Act Taxpayer Protection prohibits the Secretary of Education from issuing regulations or executive actions that increase the costs of the federal student loan program.

The bill was eventually incorporated into the College Cost Reduction Act, which failed to come to a vote in the House.

“Congress could still consider taking steps to block future administrations from canceling the debt,” Preston Cooper, a senior fellow at the American Enterprise Institute, said in a blog entry.

Cooper said Republicans may not want to risk the possibility that the next Democratic administration will successfully pursue a loan cancellation strategy that is less vulnerable to legal challenges.

Borrowers with private student loans could find relief by refinancing to lower their monthly payments. An online tool like Credible can help you compare student loan refinancing rates before applying to help you find the best deal for you.

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Have a finance-related question but don’t know who to ask? Email The Credible Money Expert at moneyexpert@credible.com and Credible could answer your question in our Money Expert column.



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