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Wednesday, February 5, 2025

Student Loan Forgiveness: Who’s Eligible Under Biden’s New Plan?

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Biden Administration Announces Widespread Student Loan Forgiveness

The Biden administration has announced a significant wave of student loan forgiveness, impacting nearly 150,000 borrowers and totaling over $3.1 billion in debt relief. This action encompasses several programs, including the Borrower Defense to Repayment program, addressing cases where students were misled by their institutions, discharges for borrowers with total and permanent disabilities, and enhancements to the Public Service Loan Forgiveness (PSLF) program. This sweeping initiative provides substantial relief to a broad range of individuals burdened by student loan debt and highlights the administration’s commitment to addressing the student debt crisis.

Key Takeaways: A Wave of Student Loan Forgiveness

  • Massive Debt Cancellation: Over $3.1 billion in student loan debt will be forgiven, affecting almost 150,000 borrowers.
  • Borrower Defense Success: 73,600 borrowers defrauded by the Center for Excellence in Higher Education will receive $1.15 billion in relief alone.
  • Disability Discharge Expanded: 61,000 borrowers with total and permanent disabilities will see $2.5 billion in debt erased.
  • PSLF Program Expansion: 6,100 public servants will receive $465 million in loan forgiveness under the revised PSLF program.
  • Automatic Relief for Many: Eligible borrowers will receive forgiveness automatically; no application is needed in many cases.

Massive Relief for Students Misled by For-Profit Colleges

The Department of Education announced group discharges for a staggering 73,600 students who attended schools owned by the Center for Excellence in Higher Education. This includes institutions like Independence University and California College San Diego. The total debt forgiveness for this group amounts to a significant $1.15 billion. These borrowers attended these institutions between January 1, 2006, and August 1, 2021. The Department cited misleading practices and a failure to provide a quality education as the justification for this large-scale debt forgiveness.

Further individual loan discharges were granted to 11,000 borrowers who attended Drake College of Business between January 1, 2008, and July 31, 2015, when the school closed. This amounts to $107 million in debt relief. An additional 280 borrowers from the Criminal Justice Program at Lincoln Technical Institute in Lowell and Somerville, Massachusetts, will also see their debt erased, totaling $1.4 million. These discharges cover students enrolled between 2010 and 2013.

Automatic Debt Relief: No Application Necessary

A crucial element of this initiative is that eligible borrowers will receive this aid automatically. They do not need to apply for the loan discharge. The Department of Education stated that those who qualify should begin receiving emails in the coming days, notifying them of the debt cancellation. This streamlined approach ensures that those most in need of relief receive it promptly.

Significant Debt Relief for Borrowers with Disabilities

In a separate but equally impactful announcement, the Department of Education revealed that 61,000 federal student loan borrowers with total and permanent disabilities will receive $2.5 billion in debt erasure. This round of relief includes borrowers automatically approved for forgiveness through data matches with the U.S. Social Security Administration and the Department of Veterans Affairs. Other borrowers had previously applied for the loan discharge.

Total and Permanent Disability (TPD) Discharge Program

Borrowers may qualify for a Total and Permanent Disability (TPD) Discharge if they have a mental or physical disability that’s severe and permanent, preventing them from working. Documentation of the disability can be provided by a doctor, the Social Security Administration, or the Department of Veterans Affairs. This program underscores the administration’s commitment to supporting individuals facing significant health challenges by alleviating the burden of student loan debt.

Public Service Loan Forgiveness (PSLF) Program Expansion

The Department of Education also granted loan forgiveness to 6,100 borrowers under the Public Service Loan Forgiveness (PSLF) program, totaling $465 million. The PSLF program, enacted in 2007, allows employees of the government and certain non-profit organizations to have their federal student loans discharged after 10 years of on-time payments. However, the program has faced criticism in the past for its complexity and restrictive eligibility requirements resulting in many borrowers being denied forgiveness despite meeting the qualifications.

Addressing Past PSLF Shortcomings

The Biden administration has actively worked to address the issues that have plagued the PSLF program. They have made significant efforts to broaden eligibility and facilitate reapplications for borrowers who were previously denied due to technicalities. This included providing a more user-friendly application process and clarifying the criteria for qualifying employment. The administration’s efforts to improve the PSLF program demonstrate a significant commitment to supporting public servants who dedicate their careers to serving the community.

The Department of Education encourages borrowers to use the PSLF help tool to effectively search for qualifying employers and access the employer certification form. Detailed information about program requirements can be found on studentaid.gov. These resources are designed to simplify the application process and ensure that eligible borrowers can successfully navigate the path toward loan forgiveness.

In conclusion, the Biden administration’s sweeping student loan forgiveness initiative represents a landmark effort to address the financial burdens faced by millions of Americans. By targeting borrowers misled by institutions, individuals with disabilities, and public service employees, this initiative signifies a crucial step towards reforming and improving the student loan system while providing much-needed relief to countless individuals.

Article Reference

Amanda Turner
Amanda Turner
Amanda Turner curates and reports on the day's top headlines, ensuring readers are always informed.

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