Is loan forgiveness happening?
Those who are eligible have been enrolled in repayment plans for at least 10 years and originally borrowed $12,000 or less for college, the Education Department said. For every $1,000 borrowed above $12,000, a borrower can receive forgiveness after an additional year of payments, the department added.
Those who are eligible have been enrolled in repayment plans for at least 10 years and originally borrowed $12,000 or less for college, the Education Department said. For every $1,000 borrowed above $12,000, a borrower can receive forgiveness after an additional year of payments, the department added.
Besides relief via the IDR and PSLF, the Department of Education said 513,000 borrowers have received forgiveness due to permanent disabilities, and $22.5 billion has been received by 1.3 million borrowers who were defrauded by their schools.
You may be eligible for income-driven repayment (IDR) loan forgiveness if you've have been in repayment for 20 or 25 years. An IDR plan bases your monthly payment on your income and family size.
The deadline to apply for student loan debt relief is December 31, 2023. The initial deadline to apply for the president's federal student loan forgiveness plan until December 31, 2023.
For a borrower to be eligible for this forgiveness they must be enrolled in the SAVE Plan, have been making at least 10 years of payments, and have originally taken out $12,000 or less for college.
Thanks to the Biden-Harris Administration's SAVE plan, starting today, the Administration will be cancelling debt for borrowers who are enrolled in the SAVE plan, have been in repayment for at least 10 years and took out $12,000 or less in loans for college.
There are many benefits to paying off your student debt early. You will save on student loan interest and get out of debt faster while improving your debt-to-income (DTI) ratio. With a higher DTI ratio and more disposable income, you could pursue other financial goals, such as buying a house or saving for retirement.
If you default on your student loan, that status will be reported to national credit reporting agencies. This reporting may damage your credit rating and future borrowing ability. Also, the government can collect on your loans by taking funds from your wages, tax refunds, and other government payments.
'A massive student debt strike'
The fact that up to 40% of borrowers didn't make a payment “reflects exactly what we've been warning would happen should Biden turn the debt collection apparatus back on,” said Astra Taylor, co-founder of the Debt Collective, a union for debtors.
Is it too late to apply for student loans for 2023?
To be considered for federal student aid for the 2023–24 award year, you can complete a Free Application for Federal Student Aid (FAFSA®) form between Oct. 1, 2022, and 11:59 p.m. Central time (CT) on June 30, 2024. Any FAFSA corrections or updates must be submitted by 11:59 p.m. CT on Sept. 14, 2024.
If you work full time for a government or nonprofit organization, you may qualify for forgiveness of the entire remaining balance of your Direct Loans after you've made 120 qualifying payments—i.e., 10 years of payments. To benefit from PSLF, you need to repay your federal student loans under an IDR plan.
The Fresh Start program for borrowers with previously defaulted student loans will prevent withheld tax refunds through at least September 2024. And borrowers won't newly fall into default as payments resume. The White House announced a 12-month student loan on-ramp from Oct. 1, 2023 to Sept.
In a pair of recent cases, the U.S. Supreme Court ruled on the Biden administration's student loan forgiveness program. In Biden v. Nebraska, which was decided 6-3, the court struck down the administration's student loan forgiveness program and agreed with the six challenging states that they had standing to sue.
However, in June 2023, Congress passed a law preventing further extensions of the federal student loan payment pause. The U.S. Department of Education is now providing a 12-month on-ramp to repayment, starting on October 1, 2023, and ending on September 30, 2024.
Student loan debt slows new business growth and limits consumer spending. Broad student loan debt forgiveness may help boost the national economy by making it more affordable for borrowers to participate in it.
Public Service Loan Forgiveness
To qualify, you must work for an eligible non-profit organization or government agency full-time while making 120 monthly qualifying payments. Payments made under an IDR plan count as qualifying payments for the purposes of PSLF.
| Eligible | Ineligible |
|---|---|
| Direct Subsidized Loans Direct Unsubsidized Loans Direct PLUS Loans Direct Consolidation Loans | Federal Family Education Loan (FFEL) Federal Perkins Loan (Perkins Loan) Student loans from private lenders |
You're not eligible for federal student loan forgiveness programs if you have private loans, but there are other strategies for managing private loan debt.
Student loan borrowers may be eligible for a refund of certain payments made, according to loan servicer statements. But only for a limited time. Millions of borrowers were thrust into repayment in October following the end of the long-running Covid-era student loan pause, which had been in effect since March 2020.
Can a student loan be refunded?
Contact your loan servicer to request that your payment be refunded.” So, if you made a student loan payment pre-pandemic or in the early stages, you're eligible for a Department of Education refund.
There are specific situations when a student loan can be removed from a credit report and nearly all of them are related to inaccuracies. Some examples of inaccurate information include: Missed or late payments (either during regular repayment periods or forbearance and deferment) Student loan default.
Student loans are considered good debt due to their potential for long-term benefits, including increased earning potential. Other factors of good debt include lower interest rates, flexible repayment options, and potential tax deductions.
Key takeaways. Paying off student loans early should come second to having an emergency fund and retirement savings. You lose the opportunity to get some of your balance forgiven through a student loan forgiveness program if you pay off your loans early.
What happens if you don't pay off student loans in 25 years? Any remaining balance on your student loans will be forgiven after 25 years of payments. But be cautious: You may be required to pay income tax on the forgiven amount.
