Biden Student Loans

Biden student loans believes that a post-high school education should be a ticket to a middle-class life, but for many, borrowing for college is a lifelong burden that prevents them from achieving that goal. In the campaign, he promised to reduce student debt. Biden’s administration is fulfilling its promise today, providing families with breathing room as they prepare to start paying back debt after the pandemic’s economic crisis.

Since 1980, the total cost of obtaining a four-year degree from either public or private college has nearly tripled after considering inflation. Federal funding for students from lower- and middle-income families has been unable to keep up, with Pell Grants now only accounting for a third of the cost compared to 80 percent during previous decades. The result is students left with no other option but to take out loans if they wish to pursue an undergraduate education. A Department of Education analysis shows the typical undergraduate student carrying debt leaves school with over $25,000 in loans.

What the program means to you, and what’s next

President Biden, Vice President Harris, and the U.S. Department of Education have unveiled a three-part plan to ease the burden of federal student loan borrowers from working and middle class backgrounds as the pandemic wanes. Up to $20,000 can be forgiven through this offer. If you’re asking yourself “how do I claim this relief?”, here’s your answer: sign up for notifications at the Department of Education subscription page by Dec. 31, 2023.

Student Loan Debt Relief Plan of the Biden Administration

Part 1. Student loan repayment pause

The Biden-Harris Administration has extended the student loan repayment pause several times because of the economic challenges created by the pandemic. Consequently, since President Biden took office, no one with a federally held loan has had to pay a single dollar in loan payments.

It is necessary for the Biden-Harris Administration to provide borrowers with a smooth transition back to repayment and to assist those at highest risk of delinquency once payments resume to address the financial harms of the pandemic.

A recent law prohibits further extensions of the payment pause. Student loan interest will resume on Sept. 1, 2023, and payments will begin in October. We will notify borrowers well in advance of the restart of payments.

Check StudentAid.gov/coronavirus regularly for the latest information on the payment pause and other COVID-19 relief.

Part 2. A targeted debt relief program for low- and middle-income families

The U.S. Department of Education is offering up to $20,000 in debt forgiveness for Pell Grant recipients with loans held by the Department and up to $10,000 for those without. Those with an individual income under $125,000 or a household income under $250,000 can take advantage of this one-time relief. For more information on this student loan debt assistance program, visit our website.

In addition, borrowers employed by nonprofits, the military, or federal, state, tribal, or local governments may be eligible to have all of their student loans forgiven by the Public Service Loan Forgiveness (PSLF) program. More information about eligibility and requirements is available here.

Part 3. Make student loan repayment more manageable for current and future borrowers

The U.S. Department of Education has long offered income-based repayment plans. A new income-driven repayment plan proposed by the Biden-Harris Administration will reduce future monthly payments for lower- and middle-income borrowers by substantially.

According to the draft rule:

In the most recent income-driven repayment plan, borrowers could pay up to 10% of their discretionary income per month on undergraduate loans.

Increase the amount of income that is considered non-discretionary and therefore is protected from repayment, so that a borrower earning less than 225% of the federal poverty level will not be required to pay a monthly payment.

When borrowers have loan balances of $12,000 or less, forgive loan balances after 10 years instead of 20.

As long as the borrower makes their monthly payments, the loan balance will not grow, unlike income-driven repayment plans, even when the monthly payment is zero due to low income.

Sign up for email updates from the U.S. Department of Education if you’d like to know when improvements are made to student loans.

Improve the Student Loan System for Current and Future Borrowers

Reducing monthly payments on existing loans

As a result of the Administration’s reforms, both current and future low- and middle-income borrowers will have smaller, more manageable monthly payments.

The Department of Education is in charge of crafting income-based payment plans, setting monthly amounts based on the borrower’s discretionary income. Although most can be paid off after 20 years, their complexity and insufficient coverage leaves many borrowers out and struggling to meet payment commitments.

The Department of Education proposes a rule to address these concerns and carry out Congress’ original vision for income-driven repayment:

Undergraduate loans should be cut in half, from 10% to 5% of discretionary income, each month.

Increase the amount of income considered non-discretionary and therefore protected from repayment, ensuring no borrower earning less than 225% of the federal poverty line—about the annual equivalent of a $15 minimum wage for a single borrower—will be required to make a monthly payment.

For borrowers with original loan balances of $12,000 or less, forgive loan balances after 10 years of payments instead of 20 years. The Department of Education estimates that this reform will allow nearly all community college students to be debt-free within 10 years.

The borrower’s unpaid monthly interest is covered, so that unlike other existing income-driven repayment plans, the borrower’s loan balance will not grow even when they make their monthly payments of $0.

For low- and middle-income borrowers, these reforms would simplify loan repayment and result in significant savings. For example:

With a construction management credential, a typical construction worker (earning $38,000 a year) would pay only $31 a month, versus $147 now under the most recent income-driven repayment plan, saving nearly $1,400 annually.

Under the most recent income-driven repayment plan, a single public school teacher earning $44,000 a year would pay only $56 a month on their loans, compared to $197 now.

Under the most recent income-driven repayment plan, a nurse with two children making $77,000 a year would pay only $61 a month on her undergraduate loans, compared to $295 now.

As long as these borrowers make their monthly payments, their balances will not increase, and their remaining debt will be forgiven after they make the required number of payments.

Moreover, this new plan will simplify the process of staying enrolled for borrowers. In the summer of 2023, borrowers will be able to allow the Department of Education to automatically pull their income information, avoiding the hassle of having to recertify their income every year.

Credit for loan forgiveness for public servants

Under the Public Service Loan Forgiveness (PSLF) program, borrowers who work in public service can earn credit toward debt relief. However, many borrowers have not been recognized for their public service due to complex eligibility restrictions, historic implementation failures, and inadequate counseling.

The Department of Education recently unveiled temporary changes to the Public Service Loan Forgiveness Program (PSLF) that significantly reduce the qualifications needed for forgiveness of all outstanding federal student loan debt. Under this provision, those employed in non-profit organizations, federal or state government, Tribal or local administrations; as well as military personnel may obtain relief if they have worked at least 10 years over their career—even if not consecutively—as opposed to receiving nothing for their service to date. Moreover, borrowers who had been previously told that they didn’t qualify due to possessing the wrong loan type can now reap the benefits of PSLF.

The Department of Education has put forward some regulatory changes to guarantee smoother implementation of the PSLF program in future. These updates include allowing partial, one-time, and late payments to count towards eligibility as well as certain types of deferrals and forbearances like those for Peace Corps and AmeriCorps service, National Guard duty, and military service. Moreover, it looks to make sure that non-tenured teachers employed by a college are properly calculated for determining if they have full-time work.

In order to make sure borrowers are aware of the temporary changes, the White House has launched four PSLF Days of Action for borrowers in specific sectors: government employees, educators, healthcare workers and first responders, and nonprofit workers. You can find more information about the temporary changes on PSLF.gov. You must apply to PSLF by October 31, 2022.

Biden Student Loans forgivenessbiden student loan forgiveness ?

With each passing day, the country gets closer to knowing if the Supreme Court will strike down President Joe Biden’s student loan forgiveness plan and halt relief for more than 40 million Americans.

The Court’s decision on the legal challenge to the Biden plan to provide up to $20,000 in one-time loan forgiveness is expected to be announced anytime now. Although there are signs the conservative majority on the high court will rule against the Biden plan, it still has the capacity to surprise — as it did earlier this month when it upheld a Voting Rights Act plank that forced Alabama to redraw its congressional map before 2024.

There is still hope for student loan relief even if the Court rejects the Biden administration’s legal argument for forgiving debts. Even after a ruling by the Supreme Court that was unfavorable to loan forgiveness, progressive activists and legal scholars have long argued that a separate path exists for justifying loan forgiveness. If the Biden administration moves quickly and forcefully, advocates say it has options.

As each day passes, the country gets closer to finding out if the Supreme Court will strike down President Joe Biden’s student loan forgiveness plan and halt relief for more than 40 million Americans.

The Court’s decision on the legal challenge to the Biden plan to provide up to $20,000 in one-time loan forgiveness is set to be announced anytime now. There is some evidence that the conservative majority on the high court will strike against the Biden plan, but the Court has still the capacity to surprise – see its decision earlier this month upholding a plank of the Voting Rights Act, forcing Alabama to redraw its congressional map.

However, even if the Court rejects the Biden administration’s case for forgiving debts, student loan relief may not be over. In spite of an unfavorable Supreme Court ruling, progressive activists and legal scholars have long argued there is a separate path for justifying loan forgiveness. In the event that the Biden administration moves quickly and forcefully, advocates say there are options.