The Biden administration is set to launch a new student loan forgiveness plan this October, based on a proposed schedule. This exciting initiative could help at least 25 million borrowers, according to officials from the Education Department. Even better, many borrowers might get their relief automatically, without needing to fill out an application.
However, many experts believe the new program will face legal challenges. With another key Biden student loan program already tied up in several lawsuits, there’s a real possibility that this latest initiative could be blocked before it even starts.
Here’s what borrowers need to know about Biden’s new student loan forgiveness plan:
- Relief for High-Interest Borrowers: If you’ve been hit hard by high interest rates since starting repayment, you could see $20,000 or more wiped off your student debt.
- Unenrolled Yet Eligible Borrowers: If you qualify for other forgiveness programs like income-driven repayment or Public Service Loan Forgiveness but haven’t enrolled, this initiative could still benefit you.
- Long-Term Borrowers: Undergrad borrowers who’ve been repaying for at least 20 years, and grad school borrowers who’ve been repaying for at least 25 years, are also targeted for relief.
- Low-Value Program Borrowers: If you attended a school with poor student outcome metrics or one that’s ineligible for federal financial aid, you could be eligible for loan forgiveness.
According to Education Department officials, up to 25 million borrowers might qualify for student loan forgiveness just from the high-interest category alone. This is a huge number, but there’s more. Many others could also be eligible under different categories.
Imagine the relief for those who’ve been struggling with high interest rates for years. This plan could lift a massive burden off their shoulders. Beyond that, if you qualify for other forgiveness programs but haven’t enrolled, you still have a chance. Those who’ve been repaying their loans for decades, and those who attended schools with poor outcomes or ineligible for federal aid, could also benefit.