Tag Archives: student loan relief

Biden Administration, College Affordability, Education, News & Photo Features

Biden-Harris Administration Takes Next Step Toward Additional Debt Relief for Tens of Millions of Student Loan Borrowers This Fall

President Biden presses ahead with efforts to relieve millions of Americans from the burden of student loan debt © Karen Rubin/news-photos-features.com.

In a clear demonstration of the Biden Administration refusing to give up or give in, President Biden just announced next steps to cancel student debt for some 30 million Americans – despite Republicans actually going to the Supreme Court to prevent the administration from exercising its authority.

 “Today, my Administration took another major step to cancel student debt for approximately 30 million Americans,,” President Biden stated. “By providing more information to borrowers on how they can take advantage of our upcoming debt relief programs, borrowers will be prepared to benefit swiftly once the rules are final. Despite attempts led by Republican elected officials to block our efforts, we won’t stop fighting to provide relief to student loan borrowers, fix the broken student loan system, and help borrowers get out from under the burden of student debt. 
 
“Today’s announcement comes on top of the significant progress we’ve made for students and borrowers over the past three years. That includes canceling student debt for nearly 5 million Americans so far through various actions; providing the largest increases to the maximum Pell Grant in over a decade; fixing Income-Driven Repayment so borrowers get the relief they are entitled to under the law; and holding colleges accountable for taking advantage of students and families.
 
:From day one of my Administration, I promised to fight to ensure higher education is a ticket to the middle class, not a barrier to opportunity. I will never stop working to make higher education affordable and to make sure our Administration delivers for the American people.”

This fact sheet was provided by the White House:

Next Step Toward Additional Debt Relief for Tens of Millions of Student Loan Borrowers This Fall

Starting tomorrow, the Department will email borrowers telling them about potential debt relief and giving them the opportunity to opt out   

The Biden-Harris Administration today announced that it will begin the next step toward providing student debt relief to tens of millions of borrowers this Fall. Starting tomorrow, the U.S. Department of Education (Department) will begin emailing all borrowers with at least one outstanding federally held student loan to provide updates on potential student debt relief, and to inform them they have until August 30 to call their servicer and opt out if they do not want this relief.

The rules that would provide this relief are not yet finalized, and the email does not guarantee specific borrowers will be eligible. The Department will provide additional information to borrowers once the rules are finalized this fall. These proposed rules build upon the Administration’s existing work that has approved more than $168 billion in student loan relief for nearly 4.8 million borrowers through various actions. These rules, if finalized as proposed, would bring the total number of borrowers eligible for student debt relief to over 30 million, including borrowers who have already been approved for debt cancellation by the Biden-Harris Administration over the past three years. 

“Today, the Biden-Harris administration takes another step forward in our drive to deliver student debt relief to borrowers who’ve been failed by a broken system,” said U.S. Secretary of Education Miguel Cardona. “These latest steps will mark the next milestone in our efforts to help millions of borrowers who’ve been buried under a mountain of student loan interest, or who took on debt to pay for college programs that left them worse off financially, those who have been paying their loans for twenty or more years, and many others. The Biden-Harris Administration made a commitment to deliver student debt relief to as many borrowers as possible as quickly as possible, and today, as we near the end of a lengthy rulemaking process, we’re one step closer to keeping that promise.” 

In April, the Administration released its first set of draft rules that proposed authorizing the Secretary of Education to grant student debt relief to tens of millions of borrowers across the country, including those whose balances have grown due to runaway interest and those who entered repayment on their loans a long time ago, among others. If these rules are finalized as the Department has proposed, they would authorize the Secretary of Education to provide partial or full debt relief for the following groups of borrowers:

  • Borrowers who owe more now than they did at the start of repayment. Borrowers would be eligible for relief if they have a current balance on certain types of Federal student loans that is greater than the balance of that loan when it entered repayment due to runaway interest. The Department estimates that this debt relief would impact nearly 23 million borrowers, the majority of whom are Pell Grant recipients.
    • Borrowers who have been in repayment for decades. If a borrower with only undergraduate loans has been in repayment for more than 20 years (received on or before July 1, 2005), they would be eligible for this relief. Borrowers with at least one graduate loan who have been in repayment for more than 25 years (received on or before July 1, 2000) would also be eligible.
    • Borrowers who are otherwise eligible for loan forgiveness but have not yet applied. If a borrower hasn’t successfully enrolled in an income-driven repayment (IDR) plan but would be eligible for immediate forgiveness, they would be eligible for relief. Borrowers who would be eligible for closed school discharge or other types of forgiveness opportunities but haven’t successfully applied would also be eligible for this relief.
    • Borrowers who enrolled in low-financial value programs. If a borrower attended an institution that failed to provide sufficient financial value, or that failed one of the Department’s accountability standards for institutions, those borrowers would also be eligible for debt relief.

If finalized as proposed, these new rules would authorize relief for borrowers across the country who have struggled with the burden of student loan debt. The Department expects that all four of these proposed forms of relief would be provided to eligible borrowers without requiring any action from borrowers; no application would be needed.

If, however, borrowers prefer to opt out of this debt relief for any reason, they can do so by contacting their servicer by Aug. 30, 2024. Borrowers who opt out of this debt relief will not be able to opt back in, and they will also be temporarily opted out of forgiveness due to enrollment in an IDR plan until the Department is able to automatically assess their eligibility for that benefit in a few months. In addition, borrowers would only be eligible for the proposed relief if they have entered repayment at the time that the Department would be determining eligibility, after the proposed rules are finalized.

More information for borrowers about this debt relief is available at StudentAid.gov/debt-relief.

An unparalleled track record of borrower assistance

The Biden-Harris Administration has taken historic steps to reduce the burden of student debt and ensure that student loans are not a barrier to educational and economic opportunity for students and families. The Administration secured a $900 increase to the maximum Pell Grant—the largest increase in a decade—and finalized new rules to help protect borrowers from career programs that leave graduates with unaffordable debts or insufficient earnings. The Administration continues its work to issue debt relief regulations under the Higher Education Act, with final regulations expected this fall.

The Biden-Harris Administration has approved the following debt relief for borrowers:

  • $69.2 billion for 946,000 borrowers through fixes to Public Service Loan Forgiveness (PSLF).
    • $51 billion for more than 1 million borrowers through administrative adjustments to IDR payment counts. These adjustments have brought borrowers closer to forgiveness and addressed longstanding concerns with the misuse of forbearance by loan servicers.
    • $28.7 billion for more than 1.6 million borrowers who were cheated by their schools, saw their institutions precipitously close, or are covered by related court settlements.
    • $14.1 billion for more than 548,000 borrowers with a total and permanent disability.

$5.5 billion for 414,000 borrowers through the SAVE Plan

Biden Administration, Education

Biden Announces $7.4 Billion in Student Debt Cancellation for 277,000 More Americans, Pursuing Every Path Available to Cancel Student Debt

New debt cancellation for borrowers enrolled in SAVE, other Income-Driven Repayment plans, and Public Service Loan Forgiveness comes on the heels of President Biden announcing new plans that could benefit tens of millions of Americans. This latest round of debt cancellation means that $153 billion in student debt relief has been provided for 4.3 million Americans. New plans announced by Biden would cancel student debt for over 30 million when implemented. These state-by-state fact sheets have been provided by the White House:

New debt cancellation for borrowers enrolled in SAVE, other Income-Driven Repayment plans, and Public Service Loan Forgiveness comes on the heels of President Biden announcing new plans that could benefit tens of millions of Americans. This latest round of debt cancellation means that $153 billion in student debt relief has been provided for 4.3 million Americans. © Karen Rubin/news-photos-features.com

President Biden announced that 277,000 more Americans will get their student debt canceled, bringing the total debt relief approved by the Biden-Harris Administration to $153 billion for 4.3 million Americans through various actions. This latest round of debt cancellation comes on the heels of President Biden announcing new plans that, if implemented, would cancel student debt for over 30 million Americans when combined with actions the Administration has taken over the last three years. These announcements reinforce the President’s commitment to using every path available to deliver student debt relief to as many borrowers as possible through various actions.

The 277,000 Americans receiving this latest round of debt relief are borrowers enrolled in the SAVE Plan, other borrowers enrolled in Income-Driven Repayment plans, and borrowers receiving Public Service Loan Forgiveness. The Biden-Harris Administration fixed Income-Driven Repayment (IDR) and launched the SAVE Plan last year – the most affordable repayment plan ever. Already 8 million borrowers are enrolled in SAVE, 4.5 million of those borrowers have a monthly payment of $0, and over 1 million additional borrowers have a monthly payment of less than $100. And if borrowers took out low balances of loans, the SAVE Plan puts them on a faster path to debt relief after at least ten years of payments.

Since President Biden took office, his Administration has approved over $54 billion in debt cancellation for 1.3 million borrowers enrolled in income-driven repayment plans, including the new SAVE Plan. This builds on additional actions the Biden-Harris Administration has taken to cancel debt for nearly 900,000 public service workers, 1.3 million borrowers cheated by their schools or borrowers covered by related court settlements, and nearly 550,000 borrowers with a total and permanent disability, including many veterans.

While the Administration continues to cancel Americans’ student debt through improving existing forgiveness programs and through the SAVE Plan, the Biden-Harris Administration is also pursuing new plans that, if implemented, would cancel student debt for tens of millions more. Earlier this week, the President announced his Administration’s alternative path to debt cancellation in the wake of last year’s Supreme Court decision. Learn more about these plans at StudentAid.gov/DebtRelief.

State Fact Sheets:

Biden Administration, Economic Policies, Economy, Education, News & Photo Features

FACT SHEET: Biden Announces New Actions to Provide Debt Relief and Support for Student Loan Borrowers

A college diploma was supposed to be a ticket into the middle class, instead of the poor house. After the extremists on the Supreme Court declared President Biden’s student loan forgiveness program “unconstitutional” he took immediate steps to provide support, while vowing to pursue other means. © Karen Rubin/news-photos-features.com

No President has fought harder for student debt relief than President Biden, and he’s not done yet. “President Biden will not let Republican elected officials succeed in denying hardworking Americans the relief they need,” the White House stated. Biden gets it. He understands how lives are being upended, derailed, ambitions curtailed, because of crippling student loan debt that, as a reminder, is the ONLY DEBT that cannot be erased through bankruptcy. Think about it, how many Republican Congressmembers took advantage of COVID relief loan forgiveness, intended to help employers retain workers, but can’t find a way of making the loan obligation fair, when interest rates for others were at near zero. If they don’t allow forgiveness of the entire loan, they should get rid of the onerous, unjustified interest that is compounding, and provide a fair means to repay the principle.

For so many, a college degree has been their ticket into the middle class, home ownership, a legacy for their children, and a means of finally ending the cycle of poverty. College tuition has been increasing an ungodly rates, two and three times the cost of living – because the colleges can – which is why the balances for loan repayment are so high. Biden sought to address the injustice and the imbalance by giving student borrowers the same advantage he gave businesses to stay afloat and prevent the economic hardship of the historic pandemic from becoming a Greater Great Depression.

Here is a fact sheet of new actions Biden is taking to provide debt relief and support for student loan borrowers –Karen Rubin/news-photos-features.com
 
In light of the Supreme Court’s ruling this morning, President Biden and his Administration have already taken two steps this afternoon aimed at providing debt relief for as many borrowers as possible, as fast as possible, and supporting student loan borrowers:

  • The Secretary of Education initiated a rulemaking process aimed at opening an alternative path to debt relief for as many working and middle-class borrowers as possible, using the Secretary’s authority under the Higher Education Act.
     
  • The Department of Education (Department) finalized the most affordable repayment plan ever created, ensuring that borrowers will be able to take advantage of this plan this summer—before loan payments are due. This plan helps the typical borrower save more than $1,000 a year.

In addition, to protect the most vulnerable borrowers from the worst consequences of missed payments following the payment restart, the Department is instituting a 12-month “on-ramp” to repayment, running from October 1, 2023 to September 30, 2024, so that financially vulnerable borrowers who miss monthly payments during this period are not considered delinquent, reported to credit bureaus, placed in default, or referred to debt collection agencies.

These actions reflect the President’s belief that an education beyond high school should be a ticket to the middle class. It also builds on the unprecedented steps President Biden and his Administration have taken to make college more affordable for working and middle-class families and make federal student loans more manageable. The Biden-Harris Administration has:

  • Secured the largest increases to Pell Grants in a decade.
     
  • Fixed broken student loan programs such as Public Service Loan Forgiveness, so borrowers actually get the relief they deserve.
     
  • Approved more than $66 billion in loan cancellation for 2.2 million borrowers across the country, including public service workers and those who have been defrauded by their colleges.
     

Debt Relief for As Many Borrowers as Possible, as Fast as Possible
 
The President remains committed to providing relief to low- and middle-income borrowers. For too many Americans, a ticket to the middle-class remains out of reach because of unmanageable student loan debt. COVID-19 exacerbated that challenge – risking tens of millions of borrowers’ financial security and futures because of the economic harms brought on by a once-in-a-century pandemic.
 
Today, the Department initiated rulemaking aimed at opening an alternative path to debt relief for as many borrowers as possible, using the Secretary of Education’s authority under the Higher Education Act. The Department issued a notice, which is the first step in the process of issuing new regulations under this so-called “negotiated rulemaking” process. The notice announces a virtual public hearing on July 18th and solicits written comments from stakeholders on topics to consider.
 
Following the public hearing, the Department will finalize the issues to be addressed through rulemaking and begin the negotiated rulemaking sessions this fall. The Department will complete this rulemaking as quickly as possible.

 
Lowering Monthly Payments
 
The Biden-Harris Administration today also finalized the most affordable repayment plan ever created, called the Saving on a Valuable Education (SAVE) plan. This income-driven repayment plan will cut borrowers’ monthly payments in half, help the typical borrower save more than $1,000 per year on payments, allow many borrowers to make $0 monthly payments, and ensure borrowers don’t see their balances grow from unpaid interest.
 
Specifically, the plan will:

  • For undergraduate loans, cut in half the amount that borrowers have to pay each month from 10% to 5% of discretionary income.
  • Raise the amount of income that is considered non-discretionary income and therefore is protected from repayment, guaranteeing that no borrower earning under 225% of the federal poverty level—about the annual equivalent of a $15 minimum wage for a single borrower—will have to make a monthly payment under this plan.
  • Forgive loan balances after 10 years of payments, instead of 20 years, for borrowers with original loan balances of $12,000 or less. The Department estimates that this reform will allow nearly all community college borrowers to be debt-free within 10 years.
  • Not charge borrowers with unpaid monthly interest, so that unlike other existing income-driven repayment plans, no borrower’s loan balance will grow as long as they make their monthly payments—even when that monthly payment is $0 because their income is low.

All student borrowers in repayment will be eligible to enroll in the SAVE plan. They will be able to enroll later this summer, before any monthly payments are due. Borrowers who sign up or are already signed up for the current Revised Pay as You Earn (REPAYE) plan will be automatically enrolled in SAVE once the new plan is implemented. To learn more about the new SAVE plan, visit the Department of Education’s website.

 
Ensuring Support for Borrowers Most at Risk
 
To protect the most vulnerable borrowers, the Department is creating a temporary “on-ramp” to protect borrowers from the harshest consequences of late, missed, or partial payments for up to 12 months. While payments will be due and interest will accrue during this period, interest will not capitalize at the end of the on-ramp period. Additionally, borrowers will not be reported to credit bureaus, be considered in default, or referred to collection agencies for late, missed, or partial payments during the on-ramp period. Future monthly bills for borrowers not enrolled in an income-driven repayment plan will be automatically adjusted to reflect the accrued interest during those months.
 
Borrowers who can pay should do so, but this on-ramp period gives borrowers who cannot make payments right away the necessary time to adjust, enabling them to ultimately make their monthly payments and meet their financial obligations on their loans. Borrowers do not need to take any action to qualify for this on-ramp.