Biden announces new student loan cancellation: Who is eligible for debt forgiveness?
President Joe Biden has unveiled a new plan that will allocate $9 billion for student loan forgiveness. Find out if you are eligible for the program.
President Joe Biden has announced the creation of a new government plan that will allocate $9 billion to student loan forgiveness. The measure comes three days after the resumption of debt payments, which had been suspended since the pandemic era.
The new program is the result of a campaign promise made by Biden shortly before assuming the presidency of the country. In 2020, the Democrat promised to relieve the burden of student debt for millions of borrowers. Since then, he has been under pressure to keep his promise, especially after the Supreme Court voted to overturn his initial plan to forgive up to $20,000 per loan.
The President has been making use of different programs to be able to lessen student debt, such as public service loan forgiveness and the SAVE Plan, which lessens the amount of payments by linking them to the income of the borrower.
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New student loan forgiveness: Who is eligible?
According to the Department of Education, borrowers will be divided into five categories to qualify. That is, only individuals who fit into the following five groups could obtain loan forgiveness:
- Borrowers whose balances are greater than what they originally borrowed
- Borrowers whose loans began repayment decades ago
- Borrowers who attended educational programs that did not provide “sufficient financial value”
- Borrowers eligible for assistance under programs such as income-based repayments but who have not applied
- Borrowers who have experienced financial hardship and need support but do not fall under the current student loan forgiveness system, as it "does not adequately address it"
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This is how the $9 billion will be invested
Regarding how the nine billion dollars will be used, the White House gave the following breakdown:
- $5.2 trillion will go toward relief for 53,000 borrowers in public service loan forgiveness programs
- $2.8 trillion for new relief for nearly 51,000 borrowers enrolled in income-based repayment plans
- $1.2 trillion will go to nearly 22,000 borrowers who have a total or permanent disability
According to experts on the subject, Biden’s announcement is expected to help his campaign for re-election in 2024, as the plan makes him the president who has forgiven the most student debts in the country. According to higher education expert Mark Kantrowitz, “this distinguishes him from other candidates campaigning for the highest office in the country.”