Advertiser Disclosure
Biden Will Cancel $6.2 Billion of Student Loans Through Changes to Student Loan Forgiveness
Updated On March 11, 2022
Editorial Note: This content is based solely on the author's opinions and is not provided, approved, endorsed or reviewed by any financial institution or partner.
President Joe Biden will cancel $6.2 billion of student loans for borrowers. That’s good news if you have federal student loan debt and are pursuing student loan forgiveness.
Student loan cancellation: 100,000 student loan borrowers get $6.2 billion of student loan forgiveness
The U.S. Department of Education made the major announcement, which could initially impact 100,000 student loan borrowers. Over time, the Education Department expects that 550,000 student loan borrowers can get their student loans cancelled. The Biden administration has made several historic changes to the Public Service Loan Forgiveness program. These changes have relaxed the requirements, which has increased how many borrowers can qualify.
(Learn more: How to pay off student loans)
How public service loan forgiveness works
Created in 2007, the Public Service Loan Forgiveness program helps student loan borrowers get student loan cancellation for their federal student loans. There are several qualifications needed to get student loan forgiveness.
- First, a student loan borrower must work for a qualified public service or non-profit employer.
- Second, a borrower must enroll in an income-driven repayment plan.
- Third, a borrower must make at least 120 student loan payments.
After meeting these requirements, and others, the borrower’s remaining federal student loan balance will be cancelled.
There are many jobs that qualify for student loan forgiveness. This includes police officers and firefighters to teachers and members of the military. Student loan borrowers can apply through their student loan servicer or directly with the U.S. Department of Education.
(Read: The Ultimate Guide To Student Loan Forgiveness)
Major changes to student loan forgiveness
In October 2021, the Biden administration announced major changes to student loan forgiveness. These changes will make it easier for more student loan borrowers to get student loan cancellation. To date, the Biden administration has identified the 100,000 student loan borrowers who collectively will get $6.2 billion in student loan cancellation.
The major changes will now “count” previous student loan payments that were previously ruled to be ineligible. These payments can now be “counted” toward the 120 monthly payments. The major changes include:
- Count student loan payments that were late;
- Count partial student loan payments;
- Count student loan payments made under the wrong student loan payment plan;
- Count student loan payments while members of the military were on active duty; and
- Count student loan payments that were made prior to student loan consolidation.
(Learn more: How to pay off $50,000 of student loans)
Refinance With SoFi
