Millions of student loan borrowers are scrambling to adjust to the monthly payments that started coming due in October after a yearslong pause. And many are no doubt disappointed in the fact that the Biden administration was unable to wipe out student debt broadly, thereby leaving them on the hook for those payments.
But while President Biden may not have managed to forgive student loan balances in a sweeping fashion, his administration has been able to forgive student loan debt for select borrowers. In fact, all told, the Biden administration has managed to wipe out $127 billion in student loan balances, which is more than any other president in history. And in the coming months and years, more loan balances might be erased, too.
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There are programs that allow for student debt forgiveness
The Supreme Court ruled earlier this year that President Biden couldn't just broadly forgive student loan balances. The reason the Biden administration has been successful in wiping out student debt is that it's done so based on provisions that were already in existence.
Income-driven repayment plans have long been a mainstay for student loan borrowers. And these plans commonly allow for loan balances to be canceled after a period of time.
Meanwhile, the Biden administration recently introduced the SAVE repayment plan, which could allow some student loan borrowers to see their balances forgiven after 10 years of payments. It normally takes 20 to 25 years of payments to have student loans forgiven under an income-driven repayment plan.
The Biden administration has also been able to forgive student loan balances thanks to the Public Service Loan Forgiveness program. Although the program has been historically difficult to navigate, a 2013 report by the Consumer Financial Protection Bureau found that 25% of U.S. workers may be eligible for it.
Meanwhile, the Biden administration has worked to expand eligibility under the program. So hopefully, more workers will qualify for debt relief in the future.
The Biden administration has also wiped out student loan balances for borrowers who were defrauded by the learning institutions they attended. Ideally, universities will halt the practice of making false claims. But this protection will continue to exist so that those who borrow for higher education under false pretenses can have recourse after the fact.
More borrowers could be in for relief
It's impossible to predict just how much student debt will be forgiven in total under the Biden administration (and in the future more broadly). But if you're struggling with student loans, you should know that you may eventually be eligible for relief through one of the options above (ideally, not due to fraud on the part of your university, but you never know).
If you're not currently on an income-driven repayment plan, it could pay to see if you're eligible for the new SAVE plan, or another payment option that could result in eventual loan forgiveness. And if you work in public service, do some research to see if the nature of your work might render you eligible to have a portion of your loan balance wiped out.
