Student Loan Debt Relief: Everything You Need to Know

One of the many benefits of federal college loans is student loan debt relief available for eligible people. 

However, there is better news for all college loan debtors. President Biden promised student loan forgiveness during his campaign, which he has put into action to deliver. 

According to the Department of Education, the administration has approved more than $66 billion in student loan relief to nearly 2.2 million borrowers.

The Biden Administration saw that the Federal student loan debts total $1.6 trillion for more than 45 million borrowers. Consequently, debtors range from youth to older persons.

This has made many middle-class borrowers struggle with high unending student loan payments, making living well or saving up difficult. 

Also, nearly one-third of borrowers could not complete college because of the high cost of attendance. Hence, some debtors pay off their college loans throughout their lives. 

With these observations in mind, the Biden administration seeks to reduce this burden on Americans. 

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Student Loan Debt Relief

People who have taken out student loans frequently wonder if they can have their federal student loans forgiven or get help repaying them. 

There has always been student loan forgiveness, but it was challenging to get them until recently when President Bident offered to fulfill his promises. 

Over the last two years, the Biden administration has implemented several student debt relief initiatives, resulting in significant relief for some borrowers. 

The Education Department has approved $55 billion in discharges for more than two million borrowers through targeted debt relief programs.

Here are the Student Debt Relief Programs:  

1. One-time Student Loan Debt Relief

As part of the Biden-Harris Administration’s student debt relief plan, the US Department of Education will offer one-time student loan debt relief of $20,00.

This is for debtors earning less than $125,000 individual income or $250,000 in household income and who received a Pell Grant. 

Consequently, almost every Pell Grant recipient came from a family earning less than $60,000 annually. Hence, Pell Grant recipients typically have more difficulty repaying their debt than other borrowers.

Also, borrowers who meet the income requirements but are not Pell Grant recipients in college may be eligible for up to $10,000 in loan forgiveness.

However, the student debt relief program is currently blocked by courts, so no one has gotten any relief yet from this program.

It’s on hold due to two conservative-backed lawsuits that blocked its implementation in November.

Borrowers are awaiting a Supreme Court decision on the legality of the relief, which is expected by the end of June. 

The opposition to the student debt relief act introduced a resolution to use the Congressional Review Act (CRA) to overturn Biden’s plan. They claimed the policy is discriminatory against other types of debtors in other industries. 

That it prevents these Americans, whose debts differ from those of the favored group chosen by the Biden administration, from footing the bill for this irresponsible and unfair policy

2. Public Service Loan Forgiveness (PSLF)

This student debt forgiveness is for those who devote their careers to nonprofit or government work. PSLF can release borrowers’ federal student loan debt in as little as ten years.

Under the PSLF Waiver, nearly half a million borrowers through February 2023 have gotten approval for student loan forgiveness. 

However, to take advantage of PSLF, you must repay your federal student loans through an income-driven repayment (IDR) plan.

Even though the waiver expired in October, the department is still processing PSLF applications. 

As a result, additional loan forgiveness and changes through the waiver initiative will take place in July, according to the Department of Education.

In a recent update, borrowers can process their PSLF digitally and track its progress. This is a relief for many, as it previously involved too many complicated steps.

However, the student debt relief by President Biden has canceled $42B student loans for PSLF workers.

3. Student Loan Forgiveness For Students Who Their School Has Duped

The Biden administration has also approved Loan relief for students through Borrower Defense to Repayment initiatives. 

This program will help borrowers misled or defrauded by their educational institutions to eliminate their federal student loan debt.

The administration forgave $6 billion in federal student loan debt for those that attended Corinthian Colleges

This for-profit college chain included Everest College, Heald College, and Wyotech. In addition, the administration approved $4 billion in student loan forgiveness for graduates of ITT Technical Institutes, another defunct for-profit institution. 

4. Disabled Borrowers Can Get Student Loan Forgiveness

Another Biden administration initiative has resulted in $6 billion in automatic student loan forgiveness for 300,000 disabled borrowers.

That relief was provided by the Total and Permanent Disability (TPD) Discharge program, which can discharge federal student loan debt for borrowers who cannot work because of a medical condition. 

Impending TPD Discharge program improvements set to take effect later this year will make it easier for many borrowers to obtain relief through the TPD Discharge program.

5. Forgiveness of Income-Driven Repayment (IDR)

Your income and family size determines the monthly payment for an IDR plan. If you repay your student loans through an IDR plan, any remaining balance will be forgiven after a certain number of payments over 20 or 25 years. 

Because of the one-time IDR adjustment, previous repayment periods, deferment, and forbearance may now count toward your IDR forgiveness. 

Also, borrowers with certain non-Direct loans may need to act by the end of 2023 to benefit from this change.

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6. Loan Forgiveness for Teachers

Teachers working in elementary or secondary schools or educational service agencies that serve low-income families for five years can get up to $17,500 in debt forgiveness. 

7. Service in the Military

If you have served in the military, you may be eligible for unique benefits on your student loans from ED and the US Department of Defense.

Interest rate caps under the Servicemembers Civil Relief Act and Department of Defense student loan repayment programs are among the benefits.

Related Questions 

Will The Lawsuits Be Successful?

Sincerely, nobody can tell. It needs to be clarified whether any of the lawsuits filed to prevent student loan cancellation will be successful.

Can I Still Apply For Debt Forgiveness?

No. For now, the Department of Education has prohibited new applications for relief until the outcome of the lawsuits. It notified approved applicants via email, but the relief remains on hold.

Was I Approved In Error? 

Some people received an approval email from the Department of Education that they had been approved for debt relief. 

On December 7, 2022, the department announced that nine million borrowers had mistakenly sent these emails. 

In the days that followed, those affected received a correction email. However, you were likely correctly approved if you didn’t get a correction email.

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Final Thoughts

With the debt relief plan, the Department of Education will set up better ways to establish a simple application process for borrowers to get relief. This debt relief will not be treated as taxable income for federal income tax purposes. 

The Department of Education has also taken significant steps to strengthen accountability so students are not tasked with mountains of debt with little payoff. 

They will subsequently hold colleges accountable for their role in the student debt crisis in the future. 

This includes insisting they publish an annual watch list of the programs in the country with the highest debt levels so that students registering for the next academic year can avoid such programs.

The debate is still on if cancellation of student loans is right with many Americans in favor of this law.


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